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A consumer buys 10 units of a good at a price of Rs. 9 per unit. At price of Rs. 10 per unit he buys 9 units. What is price elasticity of demand / Use expenditure approach. Comment on the likely shape of demand curve on the basis of this measure of elasticity. |
Answer» Solution :`{:("Price (Rs.)","Quantity (in UNITS)","Total Expenditure in Rs."("Price"XX"Quantity")),("9","10","90"),("10","9","90"):}` Demand is unitary elastic (ED = 1) as total expenditure remains constant with the increasing in price. |
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