Question

Given that t of demand = -5. A consumerbuys 10 kg at the price of Rs. 5 per kg. Find the new price if now he buys 20 kg.

Answer 1

price elasticity of demand = -5

original demand = 10 kg

new demand = 20 kg

change in demand = 10 kg

original price = 5 rs

new price = x

change in price = x-5

-5 = 10/x-5  x   5/10

-5 = 10/x-5   x  1/2

-5 = 10/2x-10

-10x + 50 = 10

-10x = -40

x = 4 rs