Question

the demand for a good at Rs.10 per unit is 40 units. Price falls by Rs.5 . If price elasticity of demand is (-) 3, calculate​

Answer 1

Answer:

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Explanation:

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Answer 2

Answer:

ANSWER

Given, P=Rs.10; P

1

= Rs.8;

△P=P

1

−P=Rs.8−Rs.10=(−)Rs.2

E

d

=(−)2

Percentage change in price =

P

△P

×100

=

10

−2

×100=(−)20 per cent

Price elasticity of demand (E

d

)=

Percentagechangeinprice

Percentagechangeinquantitydemanded

−2=

−20%

Percentagechangeinquantitydemanded

Percentage change in quantity demanded =(−)2×(−)20 per cent = 40 per cent

Percentage increase in quantity demanded = 40%.