Qd=400-8P, Price increases from 10 to 15, Calculate price elasticity of demand.

Qd=400-8P ,Price increases from 10 to 15

Calculate price elasticity of demand.

Qd=400-8P

P1=10, Q1=400-8×10

                  =400-80

                   =320

P2=15, Q2=400-8×15

                  =400-120

                  =280

P1=10, Q1=320

P2=15, Q2=280

∈=∆Qd/Q/∆P/P

 = (∆Qd/Q)×(P/∆P)

  =(Q2−Q1)/Q×[P/(P2−P1)]

= (280−320)/320×[10/(15−10)]

=−40/320×10/5

=-0.125×2

= -0.25 

The elasticity of normal goods are always negative

The elasticity of demand 0.25

0.25<1 ; inelastic