Question

price Ed = 2 ; price of commodity happen to be increased by 10%. find the change in quantity demanded when initially he was buying 120 units 120 units of the commodity.​...

Answer 1

Answer:

Percentage change in price =10 per cent

Or,

P

△P

=0.1;Q=120;E

d

=2

We know,

Price elasticity of demand (E

d

)=(−)

Q

△Q

×

△P

P

2=(−)

120

△Q

×

0.1

1

⇒2=(−)

12

△Q

△Q=−24

Q

1

=Q+△Q=120+(−)24=96

New quantity =96 units.