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Doubt on Price Elasticity of Demand

P

phani987

Member
I am having a doubt on calculation of PED using original method.

It is said that the numerator of PED calculation is change in quantity demanded/ original quantity demanded

Is it the change always be Q2-Q1 and if so, why? Q1 is original quantity demanded and Q2 is quantity demanded after change in price.

Can it be Q1-Q2?


Please help me with this....
 
(Q2-Q1)/Q1 is how you calculate a percentage change in quantity demanded.

If the quantity has risen, then Q2-Q1 will be positive, so the percentage change will be positive.

If the quantity has fallen, then Q2-Q1 will be negative, so the percentage change will be negative.

It would be rather confusing if a +10% change in quantity demanded represented a fall in quantity, which is what Q1-Q2 might give you.
 
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