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To demonstrate an elastic demand example, if quantity falls from 100 units to 50 units when price rises from $5 to $6.50, the PED would be: PED = (50 100) / 100 * 1.3 / (6.50 5) / 5 * 1.3 = -50/100 * 1.3 / 1.5/50 * 1.3 = -0.65 / 0.39 = -1.67 Here, the negative PED greater than 1 in absolute value shows demand is elastic a small price increase results in a large drop in demand

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