1.

household increases its demand for a commodity from 40 units to 50 units when its price Falls by 10% what is the price elasticity for a commodity

Answer»

The price elasticity is 2.5 IE. the demand is ELASTIC demand..
elasticity = (\% \: <klux>CHANGE</klux> \: in \: qty \div \% \: change \: in \: price)
ie 10/40=25%= % change in qty demanded
25/10= 2.5



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