When the prices of a good falls from Rs 10 to Rs 8 per unit, its demanad rises from 20 unit to 24 unit.
What can you say about price elasticity of demand of the good through the 'exenditure approch'
जब किसी वस्तु की कीमत 10रू प्रति इकाई से 8रू प्रति इकाई हो जाती है तो उसकी मांग 20 इकाईयों से
24 इकाई हो जाती है तो व्यय विधि द्वारा वस्तु की मांग लोच के बारे में क्या कहना चाहेंगें।
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Given:
Q
1
=20
Q
2
=24
P
1
=Rs10
P
2
=Rs8
Now we have:
Total initial expenditure=Q
1
×P
1
=10×20=Rs200
Total final expenditure=Q
2
×P
2
=18×24=R192
since, the total expenditure is falling with a decrease in the price of the commodity, we can say that price elasticity of demand for the good is less than 1.
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