Question

What quantity of a commodity would a household purchase at a price of 12
per unit, if he purchases 40 units ofitat 10 per unit? Price elasticity of demand
is (-) 1.5.​

Answer 1

Explanation:P = ₹10/unit & Q = 40 units

.P1 =₹12/unit & Q1 = ?Q = Q1-Q = Q1-40 & ∆P = P1-P = ₹2(12–10)Ed = ∆Q/∆P × P/Q(-) 1.5 = Q1-40/2 × 10/40(-) 1.5×2 = Q1-40 × 1/4(-) 3×4 = Q1-40/2(-) 12/2 = Q1-40(-) 6 = Q1-40Q1 = 40–6Q1 = 34 units34 units of a commodity he would purchase

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Answer 2

Answer:

Price Elasticity of Demand It is the ratio between percentage change in quantity demanded and percentage change in own price of the commodity. It is represented by a symbol (Ed ). In other words, Price Elasticity of Demand is the responsiveness of quantity demanded to change in price.