Question

Yesterday, the price of a pencil box was Rs 30 a box, and Shreya was willing to buy 10 boxes
Today, the price has pone up to Rs 30.75 a box, and Shreya is now willing to buy x boxes, Is
Shreya's demand forboxen elastic orinelastic? What is Shreya'selasticityof demand?​

Answer 1

Answer:

don't know ❣❣

Answer 2

Shreya's demand for boxes is elastic in nature.

Elastic demand : The products which are not very much essential in are day to day life and whose purchase can be postponed if rise in price, those goods have elastic demand. There close substitutes are also very easily available.  Example : Car, AC, Washing Machine etc. have elastic demand.

PED > 1

Inelastic demand : The quantity demanded is not very much affected by the the change in price. The goods that are necessary like gasoline and food falls under inelastic demand. If the price of food is increased then also people will buy it.

PED < 1

Purchase of pencil boxes can be postponed and therefore the demand is elastic in nature.

Given :

P1 = Rs30/box

Q1 = 10

P2 = Rs30.75/box

Q2 = x

To Find :

Elasticity of demand.

Solution :

Elasticity of demand = % Change in Quantity

                                     % Change in Price

Elasticity of demand = ΔQ / Q

                                     ΔP / P

Elasticity of demand =     (10 - x) / 10    

                                     (30 - 30.75) / 30

Elasticity of demand = -4(10 - x) > 1

We will drop the negative sign.

Therefore, elasticity of demand is 4(10 - 1) which should be greater than 1