Question

Price, elasticity of demand for a product is"unity. A household buys 25 units of this
product at the price of rs 5 per unit . If the
price of product prices by rs 1, how much quantity of the product will the house
hold buy​

Answer 1

New Quantity = 20 units

Solution :

Price Elasticity of demand

Ed= ∆Q/∆P *P/Q=∆Q/1* *5/25=

As price is decreasing, the quantity demanded will increase, it means New Quantity = Original Quantity (Q) - Change in Quantity( ∆Q)

25-5=20.