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(i) Arrange the following coefficients of price elasticity of demand in ascending order: -0.7, -0.3, -1.1, -0.8 (ii) Comment upon the degree of elasticity of demand for Good X, using the total outlay method, if the price of X falls from t 18 per unit to Rs.13 per unit and its quantity demanded rises from 50 units to 100 units |
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Answer» (i) Ascending order: -0.3, -0.7, -0.8, -1.1 (minus sign only represents the inverse relation between price and quantity demanded) (ii)
Conclusion: The given data shows an inverse relation between Px and total outly, thus as per the total expenditure method, Ed > 1. |
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