Answer:
-1.25
Explanation:
The price elasticity of demand is the ratio of the percentage change in quantity demanded to the percentage change in price. It measures the degree of responsiveness of change in demand to a change in price.
In this question, %change in demand is (5-4)/4 * 100 = 25%
% change in price is (40-50)/50 * 100 =-20%
The price elasticity of demand is = % change in quantity demanded/% change in price = -25/20 = -1.25
