Unit I - Introduction To Engineering Economics

G. S.
MANDAL’S
(An Autonomous Institute)

Class: TY (Autonomous)
Academic Year 2023-24, Semester: 5th
Course: Engineering Economics, Finance & Costing

Course Instructor: Prof. Krushna A Antarkar
Department of Mechanical Engineering
Prepared By:Prof. Krushna A. Antarkar 1
Engineering Economics, Finance &
Costing (EEFC)
Course Structure
Code : HSM301 Credits:3-0-0
Teaching Scheme: Mid Semester Exam-I (Marks): 15 Marks
Theory: 03 Hrs./Week Mid Semester Exam-II (Marks): 15 Marks

Tutorial: - Teacher Assessment: 10 Marks
Continuous In-semester Evaluation:

10 Marks
End Semester Examination : 50 Marks
End Semester Examination Duration:

02 Hrs.
3
1. Understanding the principles of economics.
2. Analyzing cost-benefit analysis.
Objectives 3. Recognizing the role of markets and competition.
4. Understand decision making in uncertainty.
5. Getting introduced to Indian taxation system.

Introduction to Engineering Economics:
Introduction to Economics, Importance and scope of economics in
Syllabus engineering, Economic analysis and its role in project management,
Unit I
Overview of economic principles and concepts relevant to
engineering, Micro - and macroeconomics, economics of growth and
development, Demand and supply analysis. (06 Hrs.)
Cash Flow and Time Value of Money:

Interest rates, compounding, and discounting, Present value and
future value analysis, Equivalent annual cost analysis. Cash Flow –
Unit II Diagrams, Categories & Computation, Calculations, Treatment of
Salvage Value, Annual Cash Flow Analysis, Analysis , Calculating Rate
of Return, Incremental Analysis. (06 Hrs.)

Elements of Managerial Economics
Cost & Cost Control –Techniques, Types of Costs, Lifecycle costs,
Syllabus Budgets, Break even Analysis, Capital Budgeting, Application of
Unit III Linear Programming. Investment Analysis – NPV, ROI, IRR, Payback
Period, Depreciation, Time value of money (present and future
worth of cash flows). Business Forecasting – Elementary techniques.
(6 Hrs.)
Rate analysis and Tendering
Rate analysis - Purpose, importance and necessity of the same,
factors affecting, task work, daily output from different equipment/
productivity. (03Hrs) Tendering - Preparation of tender
Unit IV documents, importance of inviting tenders, contract types, relative
merits, prequalification. general and special conditions, termination
of contracts, penalty and liquidated charges, Settlement of disputes.
Bid conditions, alternative specifications, Alternative Bids, Bid
process management (03Hrs).
Decision-making under Risk and Uncertainty:
Probability and risk assessment in engineering projects, Sensitivity
analysis and scenario analysis, Decision trees and expected value
Syllabus Unit V
analysis, Real options analysis. (03 Hrs). Depreciation: Basic
Aspects, Deterioration & Obsolescence, Depreciation And Expenses,
Types of Property, Depreciation Calculation Fundamentals,
Depreciation And Capital Allowance Methods, Straight-Line
Depreciation Declining Balance Depreciation (03 Hrs)
Personal Financial Management
Insurance, Investment, Insurance Vs investment, Investment types,
Equity and debt, Investment options, lump sum, SIP, STP, Compounding
effects of investment, Investment analysis, Introduction to Stock
Unit VI market, fundamental and technical analysis, Derivatives, Types of
derivatives, Trading awareness (03 Hrs.)
Indian Taxing System, Types of tax: Direct and indirect taxation in
India, Excise duty, GST, Income tax introduction, Income Tax
calculations,Prepared
example (03 Hrs.)
By:Prof. Krushna A. Antarkar 7
Textbook/ Reference Books
Sr. No. Title Author Publication Edition

1. Economics for Engineers James L.Riggs, David D. Bedworth, McGraw-Hill fourth
Sabah U. Randhawa
2. Engineering Donald Newnan, Ted Eschembach, OUP -
Economics Analysis Jerome Lavelle
Principle of Engineering John A. White, Kenneth E. Case, John Wiley -
3.
Economic Analysis David B. Pratt
4. Engineering Economics R.Paneerseelvam PHI -
5. Engineering Economics Michael R Lindeburg Professional Pub -

Analysis
6 Managerial Economics V. Mote, S. Paul, G. Gupta( Tata McGraw Hill 2004
7 Principles of Economics Mankiw Gregory N. Thompson Asia 2002

UNIT I:
Introduction to Engineering Economics
Content
• Introduction to Economics.
• Importance and scope of economics in engineering.
• Micro - and Macro- economics.
• Economics of growth and development.
• Economic analysis and its role in project
management.
• Overview of economic principles and concepts
relevant to engineering.
• Demand and supply analysis.
History of Economics
 The term ‘Economics’ is derived from two Greek words, namely, Oikos (household) and
Nemein (to manage), meaning thereby household management.
 Earlier, it used to be called as Political Economy. In fact, Indian scholar and philosopher,
Chanakya (Kautilya) in his famous book ‘Arth-Shastra’ has examined both kinds of
activities, i.e. economics and political. Greek philosopher Aristotle had used the term
economics to mean the management of ‘family and the state’.
 Dr. Marshall was the first to use the term ‘economics’ in 1890 in his famous work
“Principles of Economics”.
 In 1933, Prof. Ragnar Frisch, a famous economist of Oslo University, Norway, divided the
study of economics into two parts:
i) Micro Economics, and ii) Macro Economics

Introduction
• Economics is a popular, useful and significant social science.
• Economic activities are those activities, which are concerned with

the efficient use of money and other such scarce means. These
means are used to satisfy our needs.
• In short, Economics is the study of those activities of human beings,

which are concerned with the satisfaction of human needs by
utilizing usually the limited resources.
Satisfying Unlimited needs in a world limited resources.

Definition of Economics
• Economics Studies the choices people make while trying to satisfy
their unlimited wants in a world of limited resources.
1. Wealth Definition: Material wealth of a man

• Adam Smith defined “Economics as a science which inquired into the
nature and cause of wealth of Nations”.
According to this definition —
 Economics is a science of study of wealth only;
 It deals with production, distribution and consumption of
resources;
 This wealth centered definition deals with the causes behind the creation
of wealth, and
 It only considers material wealth.
Material welfare of a man
2. Welfare definition:
According to Alfred Marshall “Economics is the study of man in the
ordinary business of life”. It examines how a person gets his income
and how he/she invests it. Thus, on one side, it is a study of wealth and
on the other most important side, it is a study of well being.
Features:
 Economics is a study of those activities that are concerned with material
welfare of a man.
 Economics deals with the study of a man in ordinary business of life.
The study enquires how an individual gets his income and how it is used.
 Economics is the study of personal and social activities concerned
with material aspects of well being.
 Marshall emphasized on definition of material welfare. Herein lies the
distinction with Adam Smith’s definition,
Prepared By:Prof. which is wealth centric.
Krushna A. Antarkar 16
3. Scarcity definition Optimum use of scarce resources
This definition was put forward by Lionel Robbins. According to him
“Economics is a science which studies human behavior as a relationship
between his needs and scarce means which have alternative uses.
Features:
 Human wants are unlimited and resources are limited.
 There is an alternative use of scarce resources.
 There has to be an efficient use of scarce resources.
 Need for optimization.

We have
unlimited
wants

And We live in a
world with
Limited
resources

Growth via production & efficient
4. Growth Oriented definition distribution of scarce resources
 This definition was introduced by Paul. A. Samuelson.
 According to the definition “Economics is the study of how

man and society choose with or without the use of
money to employ the scarce productive resources, which
have alternative uses, to produce various commodities
over time and distributing them for consumption,
among various person or groups in society.”

How do we manage the scares resource?
We produce them!
How do we need to begin production?
Using the FOUR FACTORS OF PRODUCTION!!!

The Four Factors of Production:
Land—all natural
resources used to
produce goods and
services.

Labor—the effort that
a person devotes to a
task for which that
person is paid.

Capital—any
human-made resource
that is used to produce
other goods and
services.

Entrepreneur—
ambitious leaders who
decide how to combine
land, labor and capital
resources to create new
goods and services.

Wants are
unlimited
Therefore,
People must
make Wise
Resources
choices
are pretty
limited
Importance of Economics

Opportunity Costs
• “Nothing in life is free” and “tradeoff.”
• Opportunity costs represent the potential benefits an individual, investor, or business misses
out on when choosing one option over another.
• Opportunity cost is the forgone benefit that would have been obtained by an option not
chosen.
• It can guide individuals and organizations to have more profitable decision-making.
• For example, every time that you skip class to sleep in, results in, sinking up the costs you directly paid in
tuition fee for that class. However, you could have used that time that you spent in sleeping to go to work,
go to the gym and get your homework done.
Opportunity Cost = Potential benefits one misses out when one

chooses an option over another
Formula and Calculation of Opportunity Cost
• The formula for calculating an opportunity cost is simply
the difference between Return on foregone option and
Return on Chosen Option.
Opportunity Cost=FO−CO
where,
FO = Return on foregone option
CO = Return on Chosen Option

Scope of Economics
 Economics is a social science.
 It studies man’s behavior as a rational social being.
Traditional  It is considered as a science of wealth in relation to human welfare.
Approach  Earning and spending of income was start & end point of all
economic activities.
 An individual, either as a consumer or as a producer, can optimize

his goal is an economic decision.
 The scope of Economics lies in analyzing economic problems and
Modern suggesting policy measures.
Approach  It seeks to explain what the problem is and how it tends to be
solved.
 In modern time it is both a positive and a normative science.
 Welfare economics and growth economics are key.
Economic System
 An economic system is the network that forms the economic relationships
between individuals in society.
 An economic system is a mean by which societies or governments organize

and distribute available resources, services and goods across a
geographic region or country.
 Economic systems regulate the factors of production, capital, labor &

physical resources.

Key Points
 Economic systems are grouped into traditional, command,
market/capitalistic and mixed systems.
 Traditional systems focus on the basics of goods, services, work, and

they are influenced by traditions and beliefs.
 A centralized authority influences command systems, while a market

(Capitalistic) system controls the supply and demand.
 Lastly, mixed economies are more or less a combination of command and

market (Capitalistic) systems.

Micro Economics &
Macro Economics

Micro-economics:
• The branch of economics which today is concerned with the economic behavior
of individual entities such as Industry/firm/household/person.

• The study of economic behavior of the households, firms and industries form the
subject-matter of micro-economics.
• For example, micro-economics is concerned with how the individual consumer
distributes his income among various products and services to maximize utility.
• Thus, micro-economics is concerned with the theories of product pricing and
economic welfare.
Economic behavior of individual entities

Micro-economics
• In the wealth of nations (1776), Smith considered how individual prices are set.
• He Studied the determination of prices of land, labor and capital.
• He identified and explained how the self-interest of individuals working
through the competitive market can produced a social economic benefit.
• Microeconomics has moved beyond the early concerns to include the study of
monopoly, the role of international trade, finance.

Macro-economics
• The branch of economics which is concerned with the overall performance of the
economy. i.e. deals with the functioning of the economy.
• Macroeconomics didn’t even exist in modern form until 1936, when John Maynard
Keynes published his revolutionary General theory of Employment, Interest & Money.
• Macroeconomics examines a wide variety of areas, such as how total investment
and consumption are determined.
• For example, macro economics seeks to explain how the economy’s total output of
goods and services and total employment of resources are determined and
explains the fluctuation in the level of output and employment.
Economic behavior of complete economy (Individual + Nation’s

Economy) Prepared By:Prof. Krushna A. Antarkar 43
Economics of
Growth and
Development
Economic Growth
• The term economic growth is defined as the process whereby the country’s
real national and per capita income increases over a long period of time.
• This definition of economic growth consists of the following features of

economic growth:
1. Economic Growth implies a process of increase in National Income and

Per-Capita Income. The increase in Per-Capita income is the better measure of
Economic Growth since it reflects in the improvement of living standards of
masses.
2. Economic Growth is measured by increase in real National Income and not

just the increase in the nominal national income.
In other words, the increase should be in terms of increase of output of goods and
services, and not due to a mere increase individual incomes & in the market
prices of existing goods.
Economic Growth
3. Increase in Real Income should be Over a Long Period: The increase of real
national income and per-capita income should be sustained over a long period of
time. The short-run, seasonal or temporary increase in income should not be
confused with economic growth.
4. Increase in income should be based on Increase in Productive Capacity:

Increase in Income can be sustained only when this increase results from some
durable increase in productive capacity of the economy. like modernization or use
of new technology in production, strengthening of infrastructure like
transport network, improved electricity generation etc.

Economic Development
• Economic development is defined as a sustained improvement in material
well being of a society.
• Economic development is a wider concept than economic growth.
• Apart from economic growth of national income, it includes – social, cultural,

political changes which contribute to material progress.
• In short, economic development is a process leading to a rise in the net national

product of a country in the long run.
• The economic growth involves increase in output in quantitative terms, but

economic development includes changes in quantitative as well as qualitative
terms such as social attitudes and customs along with quantitative growth of
output or national income.

Economic Growth Economic Development
Economic development implies changes in
Economic growth refers to an increase income, savings and investment along with
Meaning in the real output of goods and progressive changes in socio-economic
services in the country. structure of country (institutional and
technological changes).
Economic Growth relates to a gradual
increase in one of the components of Economic Development relates to growth of
Gross Domestic Product: Net human capital, decrease in inequality figures,
Factors
consumption, government and structural changes that improve the
spending, Per Capita Income, quality of life of the population.
investment, net exports.
The qualitative measures such as HDI (Human
Economic Growth is measured by Development Index), gender- related index,
Measure
quantitative factors such as increase Human poverty index (HPI), infant mortality,
ment
in GDP and per capita Income literacy rate etc. are used to measure
economic development.
ECONOMIC GROWTH VS. ECONOMIC DEVELOPMENT
Economic Growth Economic Development
Economic Development leads to
Economic growth brings
qualitative as well as
Effect: quantitative changes in the
quantitative changes in the
economy.
economy.
Economic growth reflects the Economic development reflects
Relevance: growth of national and per progress in the quality of life in
capita income. a country.

Demand and supply analysis: Law
and elasticity of demand and
supply

Demand
• Demand means requirements/desires.
• Demand in Economics means both the willingness as well as the ability to
purchase a commodity by paying a price.
• A man may be willing to get a thing, but he is not able to pay the price. It is not a demand
in the economic sense.
• Generally, demand for a commodity depends upon the price of the commodity.
• The relation between price and demand is inverse.
• When price of a particular commodity goes up, its demand falls and vice-
versa.
• But in exceptional cases the two variables may move in the same direction.
contd.
• There are other factors that may influence the quantity demanded.
• One such factor is the income of the consumer.
• If a man’s income increases, obviously he will be able to demand more of the goods
at a given price.
• Except that, demand for a commodity depends upon the preference of the
consumers & the price of substitute goods etc.

Law of Demand
• The law of demand expresses the functional relationship between the
price of commodity and its quantity demanded.
• It states that “the demand for a commodity tends to vary inversely

with its price” this implies that the law of demand states-
“Of All Other things remaining constant, a fall in price of a

commodity will lead to a rise in demand of that commodity and a
rise in price will lead to fall in demand.”

Assumptions
1. Income of the people remaining unchanged.
2. Preferences and habits of consumers unchanged.
3. Prices of related goods i.e., substitute and complementary goods

remaining unchanged
4. There is no expectation of future change in price of the commodity.

Price Elasticity of Demand
1. The price elasticity of demand measures how much the quantity
demanded for a good changes when its price changes.
2. The Precise definition of Price elasticity is the percentage change in
quantity demanded divided by the percentage change in price.

• When the price elasticity of a good is high, we say that the good has elastic demand.
• Also, when the price elasticity of good is low, it is inelastic.
• The length of time that people have to respond to price changes also plays a role.

Calculating Elasticities
• The Precise definition of price elasticity is the percentage change in
quantity demanded divided by the percentage change in price.
• Price Elasticity, Ed
Price Elasticity of Percentage change in quantity demanded
demand (Ed) Percentage Change in the Price
1. When X % change in price calls more than X % change in quantity

demanded the good has price-elastic demand.
2. When X % change in price produces less than X % change in quantity
demanded, the good has Price-inelastic demand.
3. One more important case is Unit-elastic Demand, which occurs when the
percentage change in quantity is exactly same as the percentage change
in price.
Price Elastic Demand
• In this fig, a halving of price has tripled quantity demanded.

Unit-elastic Demand
• In this fig, doubling of quantity demanded exactly matches the halving of
price.

Numericals on Demand
Analysis

Formulae
1. % Change in Quantity demanded = (Final Value of Quantity
demanded – Initial Value of Quantity demanded )/(Initial Value of
Quantity demanded )*100
2. % Change in Price = (Final Price – Initial Price)/(Initial
Price)*100
3. Price Elasticity of demand = |% Change in Quantity

demanded / % Change in Price|

Problem I : Katherine advertises to sell cookies for 4 rs. a dozen. She sells 50
dozen, and decides that she can charge more. She raises the price to rs. 6 a
dozen and sells 40 dozen. What is the elasticity of demand?
Solution:
• To find the elasticity of demand, we need to divide the percent change in quantity
by the percent change in price.
% Change in Quantity demanded = (40 - 50)/(50)*100 = -0.20*100 = -20%
% Change in Price = (6.00 - 4.00)/(4.00)*100 = 0.50*100 = 50%
Elasticity = |(-20%)/(50%)| = |-0.4| = 0.4
The elasticity of demand is 0.4. So, It is an Inelastic demand.

Problem : Katherine advertises to sell cookies for rs. 4 a dozen. She sells 50
dozen, and decides that she can charge less. She lowered the price to 2 rs. a
Solution:
• To find the elasticity of demand, we need to divide the percent change in quantity
by the percent change in price.
% Change in Quantity demanded = (120 - 50)/(50)*100 = 1.4*100 = 140%
% Change in Price = (2.00 - 4.00)/(4.00)*100= -0.50*100 = -50%
Elasticity = |(140%)/(-50%)| = |-2.8| = 2.8
The elasticity of demand is 2.8. So, It is an elastic demand.

Problem : Katherine advertises to sell cookies for rs. 8 a dozen. She sells 50
dozen, and decides that she can charge less. She lowered the price to 4 rs. a
Solution:
• To find the elasticity of demand, we need to divide the percent change in
quantity by the percent change in price.
% Change in Quantity demanded = (75 - 50)/(50)*100 = 0.5*100 = 50%
% Change in Price = (4.00 - 8.00)/(8.00)*100= -0.50*100 = -50%
Elasticity = |(50%)/(-50%)| = |-1| = 1.0
The elasticity of demand is 1.0. So, It is an Unit elastic demand.

SUPPLY
• Supply is defined as a quantity of a commodity offered by the
producers/Suppliers to be supplied at a particular price and at a
certain time.
 It refers to the quantity of a commodity which a firm is willing to
produce and offer for sale.
Individual
 An individual supply schedule shows the different qualities of a
supply
commodity that a producer of a firm would offer for sale at
different prices during a specified time period.
 The quantity which all producers are willing to produce and sell is
known as market supply.
Market
 A market supply schedule shows the various quantities of a
Supply
commodity that all the firms are willing to supply at each market at
a respective price during all time period.
Law of Supply
• If the price of commodity rises, the level of quantity
supplied rises, if other factors remain constant.
• Supply Curve :
1. Movement from A to B : Extension in Supply
2. Movement from B to A: Contraction in Supply
Price Elasticity of Supply
• Price Elasticity of supply is change in quantity supplied of a
commodity due to change in its price.
• The Price elasticity of supply is the percentage change in quantity
supplied divided by the percentage change in price.
• Elasticity of supply is expressed as :
• Es = % changes in qty. supplied / % changes in price
= (dq/q x 100) /(dp/p x 100)
= (dq/dp x p/q)
Where d = change, q = original quantity supplied, p = original price
Prepared By : Prof. Krushna A. Antarkar 72

(i) Suppose the amount supplied is completely
fixed. This is the limiting case of zero
Elasticity or completely inelastic
supply, which is a vertical supply
curve.
(ii) The ratio of the percentage change in quantity
supplied to percentage change in price is
extremely large and gives rise to a horizontal
supply curve. This is the polar case of
infinitely elastic supply.
(iii) In the borderline Unit-Elastic case, where the
price elasticity of supply equals 1, the
percentage increase of quantity supplied is Fig. Supply Elasticity Depends
exactly equal to percentage increase in price. Upon producer response to Price

(i)Fig displays three important cases of
supply elasticity:
a) The vertical supply curve,
showing completely inelastic supply.
b) The horizontal supply curve,
displaying completely elastic supply.
c) An intermediate case of a straight
line, going through the origin, illustrating
the borderline case of unit elastic supply.
Fig. Supply Elasticity Depends

Upon producer response to Price

Problem: Tom’s supply equation for supplying
handmade mugs is as follows: Q = 5 + 1.5PHow many
mugs will he supply if the price is 2 per mug? What if
the price is 4 per mug?
Solution:
To find out how many mugs Tom is willing to supply, we simply plug in the
price into Tom’s supply equation.
1. When the price is 2 per mug,

we find that Q = [5 + 1.5(2)] = 8 mugs
Tom is willing to sell Q = [5 + 1.5(4)] = 11 mugs
Problem: Tom’s supply equation for supplying
handmade mugs is as follows: Q = 10 + 1.5PHow many
mugs will he supply if the price is 4 per mug? What if
the price is 2 per mug?
Solution:
To find out how many mugs Tom is willing to supply, we simply plug in the
price into Tom’s supply equation.

we find that Q = [10 + 1.5(4)] = 16 mugs
Tom is willing to sell Q = [10 + 1.5(2)] = 13 mugs

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G. S.

(An Autonomous Institute)

Course: Engineering Economics, Finance & Costing

Theory: 03 Hrs./Week Mid Semester Exam-II (Marks): 15 Marks

Continuous In-semester Evaluation:

End Semester Examination Duration:

2. Analyzing cost-benefit analysis.

Objectives 3. Recognizing the role of markets and competition.

4. Understand decision making in uncertainty.

5. Getting introduced to Indian taxation system.

Prepared By:Prof. Krushna A. Antarkar 4

Cash Flow and Time Value of Money:

Prepared By:Prof. Krushna A. Antarkar 5

Sr. No. Title Author Publication Edition

5. Engineering Economics Michael R Lindeburg Professional Pub -

6 Managerial Economics V. Mote, S. Paul, G. Gupta( Tata McGraw Hill 2004

7 Principles of Economics Mankiw Gregory N. Thompson Asia 2002

Prepared By:Prof. Krushna A. Antarkar 8

i) Micro Economics, and ii) Macro Economics

• Economic activities are those activities, which are concerned with

• In short, Economics is the study of those activities of human beings,

Satisfying Unlimited needs in a world limited resources.

1. Wealth Definition: Material wealth of a man

Prepared By:Prof. Krushna A. Antarkar 17

Prepared By:Prof. Krushna A. Antarkar 18

Prepared By:Prof. Krushna A. Antarkar 19

 According to the definition “Economics is the study of how

Prepared By:Prof. Krushna A. Antarkar 20

How do we need to begin production?

Using the FOUR FACTORS OF PRODUCTION!!!

Prepared By:Prof. Krushna A. Antarkar 21

Prepared By:Prof. Krushna A. Antarkar 22

Prepared By:Prof. Krushna A. Antarkar 23

Prepared By:Prof. Krushna A. Antarkar 24

Prepared By:Prof. Krushna A. Antarkar 25

Prepared By:Prof. Krushna A. Antarkar 27

Opportunity Cost = Potential benefits one misses out when one

Prepared By:Prof. Krushna A. Antarkar 30

 An individual, either as a consumer or as a producer, can optimize

 An economic system is a mean by which societies or governments organize

 Economic systems regulate the factors of production, capital, labor &

Prepared By:Prof. Krushna A. Antarkar 32

 Traditional systems focus on the basics of goods, services, work, and

 A centralized authority influences command systems, while a market

 Lastly, mixed economies are more or less a combination of command and

Prepared By:Prof. Krushna A. Antarkar 37

Prepared By:Prof. Krushna A. Antarkar 38

of individual entities such as Industry/firm/household/person.

Economic behavior of individual entities

Prepared By:Prof. Krushna A. Antarkar 42

Economic behavior of complete economy (Individual + Nation’s

• This definition of economic growth consists of the following features of

1. Economic Growth implies a process of increase in National Income and

2. Economic Growth is measured by increase in real National Income and not

4. Increase in income should be based on Increase in Productive Capacity:

Prepared By:Prof. Krushna A. Antarkar 48

• Apart from economic growth of national income, it includes – social, cultural,

• In short, economic development is a process leading to a rise in the net national

• The economic growth involves increase in output in quantitative terms, but

% Change in Quantity demanded = (40 - 50)/(50)100 = -0.20100 = -20%

% Change in Price = (6.00 - 4.00)/(4.00)100 = 0.50100 = 50%

% Change in Quantity demanded = (120 - 50)/(50)100 = 1.4100 = 140%

% Change in Price = (2.00 - 4.00)/(4.00)100= -0.50100 = -50%

% Change in Quantity demanded = (75 - 50)/(50)100 = 0.5100 = 50%

% Change in Price = (4.00 - 8.00)/(8.00)100= -0.50100 = -50%