Question

a consumer spend ₹40 on a good at a price of ₹ 1 per unit and ₹60 at a price of ₹2 per unit the elasticity of demand is

Answer 1

Answer:

given p=rs 5 total expenditure =rs 60

therefore Q=TE/P =60/5=12

P decrease by 20%

P1= 20% less of rs 5 = rs 4

Q1=TE/P1 = 60/4=15

Now question is : P=5 , P1 =4 OR 20% less

Q=12 ,Q1= 15 i.e., 25%

now eD =% change in QD / %change in price

eD=25/20 = 1.25

eD =1.25 > 1 or highly elastic

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Answer 2

Explanation:

a consumer spend ₹40 on a good at a price of ₹ 1 per unit and ₹60 at a price of ₹2 per unit the elasticity of demand is