Price elasticity of demand measures how much a product's consumption changes in response to price changes. Mathematically, it is as follows: Price Elasticity of Demand is calculated as Price Change % Change in Demanded Quantity.
Products that are inelastic range in elasticity from 0 to 1. A change in price will result in a disproportionally large change in demand since the good's value of 1.25 indicates that it is very inelastic.
Anything with elastic qualities can return to its original shape after being stretched or compressed. For instance, after being severely stretched, a rubber can swiftly return to its original shape.
The formula for calculating the price elasticity of supply is: % change in quantity supplied / % change in price. By measuring the price elasticity of supply, economists can assess whether the quantity offered of an item is elastic or inelastic.
Hence the price increased is about 6%
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