After increasing the price of ceiling fans from $60 to $75, a firm finds that its sales decline from 100 to 80 units. the product's price elasticity (expressed as a positive number) is

The formula of product's price elasticity is calculated by % Change in Quantity Demanded / % Change in Price.

% Change quantity Demanded = ($ 75 - $60) / $60 x 100%

= 25 %

% Change in price = ($80 - $100) / $100 x 100% = - 20%

product's price elasticity = 25/20 = 1.25 (economists often drop the negative sign and express the price elasticity of demand as a positive number)