Question

The demand for a good is 300 units at Rs.20, if price rises by Rs.2 and demand falls, find the new quantity demanded, if Elasticity of demand is -2. ​

Answer 1

Answer:

P 20         Q 300

P1 22        Q1 ?

ΔP 2Δ       Q ?  

P.eD = P/Q × ΔQ/ΔP

(−)2 = 20/300 × ΔQ/2

ΔQ = 60                 or       ΔQ = Q1 − Q

−60 =  Q1 − 300

−60 + 300 = Q1      or        Q1 =  240