Question

the demand for a good doubles due to a 25% fall in its price. calculate its price elasticity of demand.​

Answer 1

Explanation:

ir answer is 2

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Answer 2

✔✅✔✅ANSWER ✔✅✔✅

Given, percentage change in price =100%

Given, percentage change in price =100%Percentage change in quantity demanded =(−)60%

Given, percentage change in price =100%Percentage change in quantity demanded =(−)60%Elasticity of demand (Ed)=Percentage change in pricePercentage change in quantity demanded

Given, percentage change in price =100%Percentage change in quantity demanded =(−)60%Elasticity of demand (Ed)=Percentage change in pricePercentage change in quantity demanded=(−)100%60%=0.6.

Given, percentage change in price =100%Percentage change in quantity demanded =(−)60%Elasticity of demand (Ed)=Percentage change in pricePercentage change in quantity demanded=(−)100%60%=0.6.Given, Ed=0.6 and 100% increase in quantity demanded, change in price can be estimated as under:

Given, percentage change in price =100%Percentage change in quantity demanded =(−)60%Elasticity of demand (Ed)=Percentage change in pricePercentage change in quantity demanded=(−)100%60%=0.6.Given, Ed=0.6 and 100% increase in quantity demanded, change in price can be estimated as under:Elasticity of demand (Ed)=Percentage change in price100%=0.6

Given, percentage change in price =100%Percentage change in quantity demanded =(−)60%Elasticity of demand (Ed)=Percentage change in pricePercentage change in quantity demanded=(−)100%60%=0.6.Given, Ed=0.6 and 100% increase in quantity demanded, change in price can be estimated as under:Elasticity of demand (Ed)=Percentage change in price100%=0.6Percentage change in price =(−)0.6100%=(−)166.67

Given, percentage change in price =100%Percentage change in quantity demanded =(−)60%Elasticity of demand (Ed)=Percentage change in pricePercentage change in quantity demanded=(−)100%60%=0.6.Given, Ed=0.6 and 100% increase in quantity demanded, change in price can be estimated as under:Elasticity of demand (Ed)=Percentage change in price100%=0.6Percentage change in price =(−)0.6100%=(−)166.67Elasticity of demand =0.6

Given, percentage change in price =100%Percentage change in quantity demanded =(−)60%Elasticity of demand (Ed)=Percentage change in pricePercentage change in quantity demanded=(−)100%60%=0.6.Given, Ed=0.6 and 100% increase in quantity demanded, change in price can be estimated as under:Elasticity of demand (Ed)=Percentage change in price100%=0.6Percentage change in price =(−)0.6100%=(−)166.67Elasticity of demand =0.6Percentage fall in price =166.67%.

Given, percentage change in price =100%Percentage change in quantity demanded =(−)60%Elasticity of demand (Ed)=Percentage change in pricePercentage change in quantity demanded=(−)100%60%=0.6.Given, Ed=0.6 and 100% increase in quantity demanded, change in price can be estimated as under:Elasticity of demand (Ed)=Percentage change in price100%=0.6Percentage change in price =(−)0.6100%=(−)166.67Elasticity of demand =0.6Percentage fall in price =166.67%.Note : Fall in price by more than 100% refers to a peculiar situation. It just cannot happen as it would take us to the realm of 'negative price'. There seems to be some fallacy in framing this question.

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