A consumer buys 80 units of goods at
a price of ₹5
per
unit .Suppose
price elasticity of demand is (-)2. At
what price will he buy 64 units ?
Answers
Answered by
7
Explanation:
0riginal price = RS 5
0riginal quantity = 80 Unit
New Quantity = 64 units
New Price = ?
price elasticity of demand = -2
price elasticity of demand = (ΔQ / ΔP) X P/Q
or -2 = (-16/ΔP) X 5/80
ΔP = 0.5
As quantity demand is decreasing, Price will Increase
New Price = Original Price + New Price
= 5 +0.5
= 5.5
Similar questions