The situation
Weekly price rises from ₹200 to ₹220. Comparable weekly orders fall from 1,000 to 850. Ignore other changes for the calculation.
Your task
Estimate midpoint elasticity and compare revenue.
Reveal step-by-step solution
Set up the problem
Midpoint volume change = −150 ÷ 925 ≈ −16.22%. Midpoint price change = ₹20 ÷ ₹210 ≈ 9.52%.
Work through the numbers
Elasticity ≈ −1.70. Revenue moved from ₹200,000 to ₹187,000.
Interpret the result
Volume was elastic over this interval and sales fell ₹13,000. Check costs and demand drivers before reversing the price.
What to remember
Use midpoint denominators for two observed points and distinguish revenue effects from profit effects.