Question

price of a good increase by 7 per unit to 9 per unit but it demand remains unchanged calculate price elasticity of demand of the good what will be the shape of demand of the curved of the good​

Answer 1

Given : Price of a good increase by 7 per unit to 9 per unit and it's demand remains unchanged.

To find : Price elasticity of demand and shape of demand curve of good.

Solution :

Price elasticity or elasticity of demand is the measure of how much the quantity demanded for certain goods changes with its change in price.

Price elasticity is given by,

$\sf E_{(d)} = \dfrac{\% \: Change \: in \: Quantity \: demanded}{\% \: Change \: in \: price}$

$\sf E_{(d)} = \dfrac{0}{ \frac{7}{9} \times 100}$

$\sf E_{(d)} =0$

This means that demand of the good is perfectly inelastic.

[ There is no change in the quantity demanded with the change of price ]

Demand curve is parallel to the y axis ( axis of price ) .

[ See the attachment ]