calculate arc price elastisity of demand and state whether elastic, inelastic or unit elastic

Question

Product price increases from $2.25 to $2.50 and the quantity demand decreases from 100 to 90.

Answer 1

100*2.25=90*2.50, so the decrease in demand is exactly matched by the increase in unit price, suggesting the demand is unit price elastic. Price appears to govern demand, meaning demand is elastic (dependent on price). The unit price would also appear to be elastic, because if it were inelastic, the demand would have remained the same. 

The increase in unit price is 2.5/2.25=11.1% approx. The decrease in demand is 10%, so the relationship to price increase (PED) is a response of 0.9 or 90%.