The demand schedule for pens is given below 25 – 50 and 20 – 100

The demand schedule for pens is given below

Price of Pen (Rs. per pen)Quantity Demanded
2550
20100

Calculate the price elasticity of demand and determine the type of price elasticity.

Solution:

P= 25
Q = 50
P1= 20
Q1 =100

Therefore, a change in the price of pens is:

Solution

In the above calculation, a change in price shows a negative sign, which is ignored. This is because price and demand are inversely related which can yield a negative value of price (or demand). Similarly, a change in quantity demanded of pens is:

Solution of economics

The price elasticity of demand for bread is 5, which is greater than one. Therefore, in such a case, the demand for pens is relatively elastic.