Question

then its price changes. its mans
demand falls to 50 units. Find out the new price, if the price elasticity of demand is (-) 2.
13. A consumer buys 160 units of a good at a price of 8 per unit. Price falls to 76 per unit. How muc
quantity will the consumer buy at the new price, if price elasticity of demand is (-) 2?
14. A consumer buys 200 units of a good at a​

Answer 1

Explanation:

As in the above numerical, elasticity of demand has been specified with a negative sign. Accordingly, we need not use ′−′ sign as a prefix to the formula of measuring elasticity of demand. Thus,

Ed=(−)QP×△P△Q

Here, P=Rs.8;P1=Rs.6;△P=P1=Rs.6−Rs.8=(−)Rs.2

Q=160 units;Q1=X units;△Q=Q1−Q=(X−160)units

Ed=(−)2

Thus, (−)2=1608×−2X−160=−40X−160

X−160=80

X=80+160=240

The consumer will buy 240 units at the new price.