Question

A consumer buys 300 units of goods y at rupees 15 per unit. The price elasticity of demand for the good is 2. At what price, will he be willing to buy 450 units of good y?​

Answer 1

Answer:

Price=307.5.

Explanation:

Price Elasticity of Demand=

$change \: in \: quantity \div change \: in \: price \times original \: price \div original \: quantity$

Change in quantity=Q2-Q1=450-300=150.Price Elasticity of Demand=2.Original Price=15 per unit.

2=150/Change in Price×15/300=15/2

Change in Price=15/2=7.5 per unit.

Total price=Original Price+Change in Price=300+7.5=307.5