Question

Price elasticity of demand for a commodity is unity and a household demands 50 units of it when its price is rupees 2 per unit. At what price will the household demands 45 units of the commodity?​

Answer 1

Answer:

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Explanation:

Price elasticity of demand for a commodity is unity and a household demands 50 units of it when its price is rupees 2 per unit. At what price will the household demands 45 units of the commodity?

Answer: The household demands 45 items at a price of 2.2 per unit.

Answer 2

Answer:

At a price of Rs 2.2, the households will demand 45 units of commodity.

Explanation:

Given,Ed = 1

Q0 = 50 units

P0 = Rs 2

Q1 = 45 units

P1 = ?

ΔQ = Q1 − Q0

ΔQ = 45 − 50 = −5

ΔP = P1 − P0

ΔP = P1 − 2

Ed = (−)ΔQ/ΔP × P0/Q0

1 = (−)−5/P1−2 × 2/50

P1 = Rs 2.2

At a price of Rs 2.2, the households will demand 45 units of commodity.