price rises from $10 to $13, and the quantity demanded falls from 100 units to 80 units. what is the price…

Explanation:

Step1: Calculate percentage change in quantity demanded

The formula for percentage change in quantity demanded is $\frac{Q_2 - Q_1}{\frac{Q_2+Q_1}{2}}\times100%$. Here, $Q_1 = 100$, $Q_2=80$. So, $\frac{80 - 100}{\frac{80 + 100}{2}}\times100%=\frac{- 20}{90}\times100%=-\frac{2000}{90}\approx - 22.22%$.

Step2: Calculate percentage change in price

The formula for percentage change in price is $\frac{P_2 - P_1}{\frac{P_2+P_1}{2}}\times100%$. Here, $P_1 = 10$, $P_2 = 13$. So, $\frac{13 - 10}{\frac{13+10}{2}}\times100%=\frac{3}{\frac{23}{2}}\times100%=\frac{600}{23}\approx26.09%$.

Step3: Calculate price - elasticity of demand

The formula for price - elasticity of demand ($E_d$) is $E_d=\frac{\text{Percentage change in quantity demanded}}{\text{Percentage change in price}}$. So, $E_d=\frac{-22.22%}{26.09%}\approx - 0.85$. We take the absolute value, so $|E_d| = 0.85$.

Answer:

0.85