Answer: The price elasticity of the demand for skateboards = 0.6.
Step-by-step explanation:
Since we have given that
Original price of skate boards = $200
Quantity of skate board = 10
New price of skate boards = $300
Quantity of skate board = 7
Since we know that "Price of commodity is inversely related to quantity demanded."
So, price elasticity of demand is given by
[tex]e_d=\frac{\Delta q}{\Delta p}\times \frac{P}{Q}\\\\e_d=\frac{10-7}{300-200}\times \frac{200}{10}\\\\e_d=\frac{3}{100}\times 20\\\\e_d=\frac{3}{5}=0.6[/tex]
Hence, the price elasticity of the demand for skateboards = 0.6.
