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Business/ economic a level help pls

Please explain how to do this question:
A business reduces the price of a product from £10 to £7. As a result, demand increases from 10,000 units to 12,000 units. Based on this info, what is the PED of this product?

my answer i got is -1.5 but the mark scheme is telling me the answer is -0.67. pls help im gonna bash my head in a wall
Original post by ssokka
Please explain how to do this question:
A business reduces the price of a product from £10 to £7. As a result, demand increases from 10,000 units to 12,000 units. Based on this info, what is the PED of this product?

my answer i got is -1.5 but the mark scheme is telling me the answer is -0.67. pls help im gonna bash my head in a wall

I think you just got the formula the wrong way around, that is all.

Price elasticity of demand is: percentage change in quantity demanded divided by percentage change in price.

The percentage change in quantity demanded is +20%.
The percentage change in price is -30%

PED is +20 divided by -30, so -0.67.
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ssokka
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Original post by tomftutor
I think you just got the formula the wrong way around, that is all.

Price elasticity of demand is: percentage change in quantity demanded divided by percentage change in price.

The percentage change in quantity demanded is +20%.
The percentage change in price is -30%

PED is +20 divided by -30, so -0.67.

thank you so much! x

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