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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:

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Answer: Elasticity of demand of samosas is 0.6

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to a change in the price of the good. It can be measured using the mid-point method,

[tex]e=\frac{Q2 -Q1}{\frac{Q 1 + Q2}{2} } * \frac{\frac{P1+P2}{2} }{P2 - P1}[/tex]

[tex]e=\frac{12,000 - 15,000}{\frac{15,000 + 12,000}{2} } * \frac{\frac{2+3}{2} }{3 - 2}[/tex]

[tex]e=\frac{- 3,000}{13,500} * \frac{2.5}{1}[/tex]

[tex]e= 0.22*2.5 = 0.5555[/tex]

Therefore, elasticity of demand is 0.6

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