When price of a good is Rs. 5, the consumer buys 20 units of that good. When price changes to Rs. 7, the quantity purchased changes to 12 units. Calculate the price elasticity of demand.
Answers
Answered by
1
Given: Q−10,Q
1
=12,P=5,P
1
=4
ΔP=(4−5)=−1,ΔQ=(12−10)=2
E
d
=(−1)
Q
P
∗
ΔP
ΔQ
=(−)
10
5
∗
−1
2
=1
E
d
=1 Unitary elastic demand.
1
=12,P=5,P
1
=4
ΔP=(4−5)=−1,ΔQ=(12−10)=2
E
d
=(−1)
Q
P
∗
ΔP
ΔQ
=(−)
10
5
∗
−1
2
=1
E
d
=1 Unitary elastic demand.
Answered by
1
Explanation:
By Using Arc Method
Arc Method = Q1 - Q2 P1 + P2
-------------- × -----------
Q1 + Q2 P1 - P2
Attachments:
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