Question

The demand function of commodity ‘X’ is given as = QX = 30 – PX. calculate

its price elasticity of demand when price falls from` 8 to ` 5.​

Answer 1

Given:

$\sf {Demand \: Function = Q_{x} = 30-P_{x}}$

To find:

Price elasticity when Price falls from ₹8 to ₹5.

Solution:

Quantity Demanded at ₹8 = 30 - 8 = 22

Quantity Demanded at ₹5 = 30 - 5 = 25

Now:-

$\sf{ P_{i} = 8, Q_{i} = 22}$

$\sf{ P_{f} = 5, Q_{f} = 25}$

$\sf{ ∆P = -3, ∆Q = 3}$

We know that:-

$\sf {E = \frac{∆Q}{∆P} \times \frac{P_{i}}{Q_{i}}}$

→ $\sf {E = \frac{3}{-3} \times \frac{8}{22}}$

→ $\boxed{\sf{E_{p} = (-)0.36}}$