Question

A consumer buys 27 units of a goods at a price of Rs 10 per unit. When the price falls to Rs 9 per unit, the demand rises to 30 units. What is the price elasticity of demand for a commodity?​

Answer 1

Explanation:

Given, P=Rs.10;P

1

=Rs.9;△P=P

1

−P=Rs.9−Rs.10=(−)Rs.1

Q=30 units;Q

1

=?

E

d

=(−)1

Price elasticity of demand (E

d

)=

Q

P

×

△P

△Q

−1=

30

10

×

−1

△Q

△Q=3

Now, △Q=Q

1

−Q

3=Q

1

−30

Q

1

=30+3=33.

Answer 2

Answer:

Explanation:

Given, P=Rs.10;P

1

=Rs.9;△P=P

1

−P=Rs.9−Rs.10=(−)Rs.1

Q=30 units;Q

1

=?

E

d

=(−)1

Price elasticity of demand (E

d

)=

Q

P

×

△P

△Q

−1=

30

10

×

−1

△Q

△Q=3

Now, △Q=Q

1

−Q

3=Q

1

−30

Q

1

=30+3=33.