Apple AirPods (earphones) price fell from €160 to €125 online - Leaving Cert Economics - Question 13(c) - 2021

To calculate the Price Elasticity of Demand (PED), use the formula:

$$PED = \frac{\text{Percentage Change in Quantity Demanded}}{\text{Percentage Change in Price}}$$

1. Calculate the changes:

   • Initial Price = €160
   • New Price = €125
   • Initial Quantity = 10,000
   • New Quantity = 15,000

2. Calculate the change in price:

   • Change in Price = New Price - Initial Price = €125 - €160 = -€35

3. Calculate the change in quantity demanded:

   • Change in Quantity = New Quantity - Initial Quantity = 15,000 - 10,000 = 5,000

4. Calculate percentages:

   • Percentage Change in Price = \frac{-35}{160} \times 100 = -21.875%
   • Percentage Change in Quantity Demanded = \frac{5000}{10000} \times 100 = 50%

5. Substitute into the PED formula:

   • PED = \frac{50}{-21.875} = -2.29

   Therefore, the Price Elasticity of Demand for Apple AirPods is approximately -1.63.