the demand of good 300 units at rs. 20 if the price rises by rs.2 and demand falls find the new demand if ed is 2
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Answer:
Given, P=Rs.20; P
1
=Rs.23;
△P=P
1
−P=Rs.23−Rs.20=Rs.3
Percentage change in price =
P
△P
×100=
20
3
×=15 per cent
Percentage change in quantity demanded =(−)30 per cent
Price elasticity of demand (E
d
)=(−)
Percentagechangeinprice
Percentagechangein quantitydemanded
=(−)
15%
−30%
= 2
Price elasticty of demand =2.
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