Help needed in solving problem

[singhshweta77]

Hi

Can anybody please help me solve this problem

An item is reduced in price from 2$ to 1$ and the number of uints sold is increased from 10 to 20. What is the coefficient of elasticity

 

[deead]

elasticity= % change in quantity/ % change in price

 

[deead]

elasticity= [(20-10)/10]/[(1-2)/1]=1/-1= -1

I hope I'm right

 

[deead]

i forgot to tell you that if the number is negative you need to use the absolute value!

 

[singhshweta77]

but the answer is given as 2 and not 1

 

[deead]

My mistake

Now that I'm reading again the problem I found what I did wrong .
The % of change in quantity is (end value-beginning value)/begining value= (20-10)/10=1.
The % of change in price is the same (end value -beginning value)/beginning value= (1-2)/2= -1/2.
The elasticity is % change in quantity/% change in price= 1/-0.5=-2 and you use the absolute value, so the answer is 2 ( as you said).