Question

please explain how own price of elasticity of demand works and give a example

Answer 1

own price elasticity of demand basically gives us the sensitivity of demand due to price changes for the particular product, it totally shows us how the demand responses to the price changes in the economy,

this is calculated as the ratio between the percentage change in quantity demanded to the percentage change in prices,

so like if the prices of apple increases from 4 to 5 and due to which demand falls from 500 to 400,

so the elasticity is

400-500/500 / 5-4/4 = -1/5 / 1/4 = -0.8