Question

Calculate price elasticity of demand of good X if a consumer does not buy its any quantity at price Rs10 per unit.
But when price falls by 10%, expenditure on it is 90. Use percentage change method.​

Answer 1

Answer:

The price elasticity of demand is calculated as the percentage change in quantity divided by the percentage change in price. Therefore, the elasticity of demand between these two points is 6.9%−15.4% which is 0.45, an amount smaller than one, showing that the demand is inelastic in this interval.

Explanation:

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