Derivation of Price Elasticity of Demand:
% 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑄. 𝐷
𝑃𝐸𝐷 =
% 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑟𝑖𝑐𝑒
where, q1 is quantity before price change;
q2 is new quantity;
p1 is original price;
p2 is new price
(Note: In the above formula, p & q are original price and original quantity, respectively)
% 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑄. 𝐷
𝑃𝐸𝐷 =
% 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑝𝑟𝑖𝑐𝑒
where, q1 is quantity before price change;
q2 is new quantity;
p1 is original price;
p2 is new price
(Note: In the above formula, p & q are original price and original quantity, respectively)