Question

consumer buys a certain quantity of a good at price of rupees 10 per unit when price falls to 8 rupees per units she buys 40% more quantity calculate price elasticity of demand​

Answer 1

Hii mate here is your answer

Answer 2

Answer:

Explanation:

Suppose the consumer initially buys 100 units of the good.

New quantity =100+40 per cent of 100=140

P=Rs.10;P1​=Rs.9;△P=P1​−P=Rs.8−Rs.10=(−)Rs.2

Q=100 units;Q1​=140 units;△Q=Q1​−Q=(140−100)units=40 units

Price elasticity of demand (Ed​)=(−)QP​×△P△Q​

=(−)10010​×−240​=2

Percentage change in price =P△P​×100

=108−10​×100=10−2​×100=(−)20%

Price elasticity of demand (Ed​)=(−)Percentage change in pricePercentage change in quantity demanded​

=(−)(−)20%40%​=2

Price elasticity of demand =2.