Question

within rise in price rs 5 the quantity demanded changes from 100 units to 95 units. find price before the changed demanded??​

Answer 1

Answer:

Supposing the price (P) before change in demand =Rs.X.

Price elasticity of demand (E

d

)=(−)

Q

P

×

△P

△Q

Here, △P=Rs.5;△Q=(−)5 units

P=Rs.X;Q=100 units and E

d

=1.2

Price elasticity of demand (E

d

)=(−)

Q

P

×

△P

△Q

=1.2

Or, (−)

100

X

×

5

−5

=1.2

Or,

100

X

=1.2

Or, X=1.2×100=120

Price before change in demand =Rs.12

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