Question

At a price of Rs20 per unit the quantity demanded of a commodity is 300 units. If the price

falls by 10% its quantity demanded rises by 60 units. Calculate its price elasticity.​

Answer 1

Answer:

Given, P=Rs.20; P

1

=Rs.23;

△P=P

1

−P=Rs.23−Rs.20=Rs.3

Percentage change in price =

P

△P

×100=

20

3

×=15 per cent

Percentage change in quantity demanded =(−)30 per cent

Price elasticity of demand (E

d

)=(−)

Percentagechangeinprice

Percentagechangein quantitydemanded

=(−)

15%

−30%

= 2

Price elasticty of demand =2.