A 5 percent fall in the price of a good raise its demand from 300 units to 318 units. Calculate its price elasticity of demand. [Ans. 1.2]
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babushaheb
babushaheb
17.08.2018
Economy
Secondary School
+5 pts
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5% fall in its price of good raise demand from 300 unit to 318 units. Calculate its price elasticity of demand?
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aditisuyog
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original demand = 300
new demand = 318
change in qty demanded = 318-300
= 18
% change in price = 5
price elasticity of demand = % change in qty demanded / % change in price
= 18/300 * 100 / 5
= 6/5
= 1.2
therefore , price elasticity of demand is 1.2
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