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Eduncle posted an MCQ
October 18, 2019 • 16:24 pm 0 points
  • UGC NET
  • Economics

If AR = 15 and MR = 5, the price elasticity of demand is

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  • Anita marin antony

    We are given with AR and MR. Now to find the price elasticity,we can use MR=AR((e-1)/e). 5=15(1-(1/e)) .ie, 5=15-15/e. 15/e=15-5 15/e=10 e=1.5

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    Tanuj rana

    Elasticity of demand = AR/AR-MR AR=15 MR=5 SO, put the value of AR & MR =>15/15-5 =>15/10 =>1.5

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    Eduncle Best Answer

    E = 
    Where, A stands for Average Revenue
    M stands for Marginal Revenue
    E stands for Elasticity of Demand.
    In our case, AR = 15, MR = 5
    Therefore, E = 15/(15 – 5) = 15/10 = 1.5
    Elasticity of demand, E = 1.5

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