Question

The demand for good X and good Y have equal price elasticity. The demand of good X rises from 200 units to 250 units due to 10% fall in its price. Calculate
percentage rise in demand of Y, if its price fall by 8 percent.​

Answer 1

Answer:20%

Explanation:

Let Q=200 and Q'=250

%of change in quantity=

Q'-Q/Q×100=

250-200/200×100=25%

% change of price of good x=(-)10%

%change of price of good y=(-)8%

%change in quantity of good x/

%change in price of good x=

%change in quantity of good y/

%change in price of good y

25%/(-)10%=%change in quantity of good y/(-)8%=

%Change in quantity of good y =20%