If the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from $4.00 to $5.00, the elasticity of demand is

If the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from $4.00 to $5.00, the elasticity of demand is
A. 2.00
B. 0.50
C. 0.65
D. 2.50
Correct Option: Answer is A
Elasticity of demand = (percentage change in quantity)/(percentage change in price)
In this case, the percentage change in quantity is (30 – 20) / 20 = 50%. The percentage change in price is (5 – 4) / 4 = 25%. Therefore, the elasticity of demand is 50 / 25 = 2.00

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