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.
