Question

Give the solution :-

When price of x doubles , it's quantity falls by 60% , calculate it's price elasticity ??

What % change in price occur if quantity doubles ??

Thanks

Answer 1

Heya ^_^

Ques :- When price of x doubles , it's quantity falls by 60% , calculate it's price elasticity ??

What % change in price occur if quantity doubles ??

Solution ___________

(1) Assume the price doubled as = 100
Then the % change in quantity demanded = -60%

Price elasticity = - % change in Quantity demanded / % change in price

So,, -60 / 100 = 0.6 Ans...

(2) Now Ed is 0.6
And change in Quantity is = 100

% change in price will be :-

Ed = - % change in Quantity / % change in price

0.6 = - 100/ 0.06 = 166.67% Ans..

Thank you

Answer 2

We are given, that when the price of X doubles, its quantity demanded falls by 60 percent. So, we can say that if the demand is to rise by double, then the price should fall by 166.66%.

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