Question

• Find out: If a firm sells 400 units of a commodity at Rs.10 units. Calculate the TR and AR.

Answer 1

Explanation:

Given,P=Rs.26; P

1

=Rs.30;

△P=P

1

−P = Rs.30−Rs.26=Rs.4

Q=30 units; Q

1

=15 units; $$

△Q=Q

1

−Q=(15−30) units = (−)15 units

Price elasticity of demand (E

d

)=(−)

Q

P

×

△P

△Q

=(−)

30

26

×

4

−15

=3.25

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