Elasticity Of Demand

Step 1: Formula for Price Elasticity of Demand (PED).
The formula for price elasticity of demand is: Where:

Step 2: Applying the values from the question.
Given: First, calculate the percentage change in quantity demanded: Next, calculate the percentage change in price:

Step 3: Calculating PED.
Now substitute these values into the PED formula:

Step 4: Conclusion.
Since the absolute value of PED is less than 1 ( ), the demand is inelastic. This means that the percentage change in quantity demanded is less than the percentage change in price.