A consumer spends Rs. 40 on a good at a price of Re. 1 per unit and Rs. 60 at a price of Rs. 2 per unit. What is
the price elasticity of demand? What kind of good it is? What shape its demand curve will take
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Explanation:
P0= rs 1 Q0=40/1= 40
P1=rd 2 Q1=60/2=30
ed=(-)percentage change in quantity demanded/ percentage change
%age change in quantity =30-40/40×100
%age change in price=2-1/1×100
ed=(-)-25%
consumer goods
slope of demand curve will be downward from left to right
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