Let slope of demand curve is (-) 0.6, calculate elasticity

Q44) Let slope of demand curve is (-) 0.6, calculate elasticity of demand when initial price is $ 30 per unit and initial quantity is 100 units of the commodity.

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Solution:
TIf the slope of the demand curve is fixed and negative, we can calculate the elasticity of demand using the formula:

Elasticity of demand = (P / Q) x (1/slope of the demand curve)
ED = P/(Q×slope of the demand curve)
ED = 30 /(100×0.6)
ED = 30/60 =0.5

Slope is negative thus answer is -0.5

NOTE if slope of the demand curve is positive then

Elasticity of demand = (P / Q) x (slope of the demand curve)

Correct option is (c)

C A foundation Economics Paper4 Part I Questions for practice