Economy, asked by vaibhavi80, 8 months ago

Ep of a good is (-)5. At the price of ₹ 10 per unit a consumer buys 200 units. At what price will he buy 100 units?​

Answers

Answered by drijjani50
0

STATISTICS

A consumer buys 100 units of Good−Y at Rs.5 per unit. The price elasticity of demand for the good is 2. At what price will he be willing to buy 140 units of Good−Y?

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ANSWER

Suppose consumer buys 140 units at price Rs.X per unit.

Price elasticity of demand (E

d

)=(−)

Q

P

×

△P

△Q

Here, P=Rs.5;P

1

=Rs.X;△P=P

1

−P=Rs.(X−5)

Q=100 units;Q

1

=140 units;△Q=Q

1

−Q=(140−100)units=40 units

E

d

=2

Price elasticity of demand (E

d

)=(−)

Q

P

×

△P

△Q

2=(−)

100

5

×

(X−5)

40

=(−)

X−5

2

2×(X−5)=−2 or 2X−10=−2

2X=−2+10=8

X=4

The consumer will purchase 140 units of Good-Y at the price of Rs.4.

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