If the price of a commodity rises from ₦200 to ₦250 and the quantity demanded falls from 100 units to 80 units, the price elasticity of demand is

PED = (% change in quantity demanded) / (% change in price). % change in Qd = (80-100)/100 × 100 = -20%. % change in P = (250-200)/200 × 100 = 25%. PED = 20/25 = 0.8. Since the absolute value is less than 1, demand is inelastic.