As the price of samosas (a kind of food in India) was raised from 2 to 3 rupees (Indian currency), their quantity demanded fell from 15,000 to 12,000

Economics Dec 17, 2020

As the price of samosas (a kind of food in India) was raised from 2 to 3 rupees (Indian currency), their quantity demanded fell from 15,000 to 12,000. Rounding to the nearest tenth, the elasticity of demand of samosas is:

Expert Solution

Price Elasticity of Demand = ((old quantity - new quantity)/(old quantity + new quantity)/2)/((old price - new price)/(old price + new price)/2)

= ((15000 - 12000)/13500)/((2 - 3)/2.5)

= (3000/13500)/(-1/2.5)

= -0.555556

= -0.56

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