Change in the demand for a goods and the change in its price.
The ratio is negative but the negative sign is usually dropped.
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The quantity, Q, demanded at price P is 100 - 4Q So Q = 25 - P/4 And therefore, the demand elasticity is -1/4 or -0.25, whatever the value of Q.
Because demand creates the price, and not the price dictates the demand.
2/10=0.2 <1 the good is price inelastic
Here are two variablesDemand and Price, whereas Price is Independent variable &Demand is dependent variable, i.e. if price of something changes the demand will also be affected. Now simple Differential Equation isd (Demand)= constantd (Price)But keep in mind that Price is a function not a simple variable.
10:1 is the natural ratio and 16:1 was the first pegged ratio