The correct answer is A. 1.20.
Price elasticity of demand is a measure of how much the quantity demanded of a good or service changes in response to a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.
In this case, the price of the good decreases from Rs. 10 to Rs. 8, which is a decrease of 20%. The quantity demanded of the good increases from 20,000 to 25,000, which is an increase of 25%. Therefore, the price elasticity of demand is 1.20.
Option B is incorrect because it is the price elasticity of supply. Price elasticity of supply is a measure of how much the quantity supplied of a good or service changes in response to a change in its price. It is calculated as the percentage change in quantity supplied divided by the percentage change in price.
Option C is incorrect because it is the income elasticity of demand. Income elasticity of demand is a measure of how much the quantity demanded of a good or service changes in response to a change in income. It is calculated as the percentage change in quantity demanded divided by the percentage change in income.
Option D is incorrect because it is the cross-price elasticity of demand. Cross-price elasticity of demand is a measure of how much the quantity demanded of one good changes in response to a change in the price of another good. It is calculated as the percentage change in quantity demanded of the first good divided by the percentage change in the price of the second good.