Write short notes on: Ratio method

Write short notes on: Ratio method

Answer: 

According to this method, elasticity is measured as the ratio of percentage change in quantity demanded to the percentage change in price i.e.


        
where:

Q2 represents final quantity demanded
Q1 represents initial quantity demanded
ΔQ represents change in quantity demanded
P2 represents final price
P1 represents initial price
ΔP represents change in price

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