Question

Price of a good rises from Rs 10 to Rs.11 per unit. As a result, quantity demanded of that good falls by 10%. Calculate its price elasticity.

Answer 1

Answer:

Not much sure,

Explanation:

price before = 10

demand = 100%

price after =11

demand now = 90%

now for 1st condition= 100/10 = 10

and for 2nd condition=90/11 = 8.1

elasticity = 10-8.1 = 1.9 Answer

Answer 2

Answer:

Initial Price = ₹10

New Price = ₹11

Change in Price = ₹1

Percent Change in Price = 1/10 * 100 = 10%

Percent Change in QDD = -10%

Ped = Percent Change in QDD/Percent Change in Price

Ped = -10/10

Ped = (-) 1

Unitary elastic demand. The negative sign shows the indirect relationship.