Toll on a bridge was increased from $.50 to a dollar and the number of vehicles crossing the bridge decreased from 520,000 to 435,000. Calculate demand elasticity for bridge use.

-0.1635

Explanation:

Given that,

Initial price = $0.50

New price = $1

Initial quantity = 520,000

New quantity = 435,000

Percentage change in quantity demanded:

= (Change in quantity demanded : Initial quantity) * 100

= [ (435,000 - 520,000) : 520,000] * 100

= (-85,000 : 520,000) * 100

= - 0.1635 * 100

= - 16.35%

Percentage change in price:

= (Change in price : Initial price) * 100

= [ (1 - 0.50) : 0.50] * 100

= (0.50 : 0.50) * 100

= 1 * 100

= 100%

Elasticity of demand:

= Percentage change in quantity demanded : Percentage change in price

= - 16.35 : 100

= - 0.1635