Question

7. What quantity of a commodity would a household purchase at a price of 12
per unit, if he purchases 40 units ofitat 10 per unit? Price elasticity of demand
is (-) 1.5.​

Answer 1

Explanation:

Given: Q−10,Q

1

=12,P=5,P

1

=4

ΔP=(4−5)=−1,ΔQ=(12−10)=2

E

d

=(−1)

Q

P

∗

ΔP

ΔQ

=(−)

10

5

∗

−1

2

=1

E

d

=1 Unitary elastic demand.

Answered By Nitya pandey