Question

being
The demand for a good doubles due to
a 25% fall in price Calculate its price.
elasticity of demand​

Answer 1

Let the original demand = x        

Let new demand = 2x                              

therefore, change in quantity demanded = x

percentage change in price = 25

price elasticity of demand = % change in qty demanded / % change in price

                                              =  x/2x * 100  /  25

                                              =  50/25

                                              = 2

therefore , the price elasticity of demand is 2

Answer 2

GIVEN: Demand for goods is doubled due to a decrease in 25% price

TO FIND: Elasticity of demand

SOLUTION:

Percentage change in price =100%

Percentage change in quantity demanded =(−)25%

The elasticity of demand (Ed )= $\frac{Percentage change in quantity demanded}{Percentage change in price }$

                                     = - $\frac{25}{100}$

                                      = 0.25

Ed =0.25 and 100% increase in quantity demanded to change in price can be estimated as under:

Elasticity of demand = $\frac{100Percent}{Percentage change in price}$ = 0.25

Percentage change in price = - $\frac{100}{0.25}$

                                                = -400

Elasticity of demand = 0.25

Percentage fall in price = 400%

Note: A fall in price by more than 100% refers to a peculiar situation. It just cannot happen as it would take us to the realm of 'negative price'. There seems to be some fallacy in framing this question.

PROJECT CODE #SPJ3

https://brainly.in/question/27260456