Question

The quantity demanded by a consumer at price Rs 9 per unit is 800 units. Its price falls by 25% and quantity demanded rises by 160 units. Calculate its price elasticity of demand.​

Answer 1

Answer:

please mark as branliest

Answer 2

Given :

Initial Price per unit = Rs 9

Initial Quantity demanded = 800 units

% change in price = 25

Change in quantity demanded = 160 units

To Find :

Price Elasticity of Demand ( ε )

Solution :

Price Elasticity of Demand ( ε ) =

$\frac{\%percentage \: change \: in \: quantity \: demanded}{\%percentage \: change \: in \: price}$

Now,

% change in quantity =

$\frac{change \: in \: quantity \: demanded}{initial \: quantity \: demanded} \times 100$

$= \frac{ 160 }{800} \times 100$

= 20 %

we have,

%change in quantity demanded = 20

% change in price = 25

Then,

ε = 20% / 25 %

= 0.8

Hence, the price elasticity of demand is 0.8 .