Question

Suppose a rise in the price of peaches from Rs.5.50 to Rs.6.50 per bushel decreases the quantity demanded from 12,500 to 11,500 bushels. Calculate the price elasticity of demand .​

Answer 1

Explanation:

100 oranges at the rate of n

oranges for N4 and sold them at the rate of

4 oranges for Nn thereby making a profit

of N45. Find the value of

Answer 2

Answer:

-0.5

Explanation:

the percentage change in quantity demand change in the product price.

the price of peaches increase from 5.50 to 6.50

and

the quantity demanded decrease from 12500 to 11500

therefore, Percentage change in price = (6.50 - 5.50)÷ 5.50 = 0.181

percentage change in quantity demanded of peaches = (11500-12500) ÷ 12500= -0.08

hence, the price elasticity of demand of peaches = -0.08/0.181 = -0.44 = -0.5

therefore, the price elasticity of demand of peaches in the case is -0.5.

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