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When the price of a commodity falls by Rs. 2 per unit, its quantity demanded increases by 10 units. Its price elasticity of demand is (-)1. Calculate its quantity demanded at the price before change which was Rs. 10 per unit. |
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Answer» Solution :`{:("PED" =[-]1" Given"),("Price before change [Initial Price] P = 10Initial QUANTITY "(Q)=?),("New Price "[P_(1)]=8 "New Quantity " (Q_(1))=?),(Delta P=-2" [Given]" Delta Q=10):}` `PED=(Delta Q)/(Delta P)xx(P)/(Q) "or" (-)1=(10)/((-)2)xx(10)/(Q)` `Q=(100)/(2)=50` So, the quantity demanded at price before change [P], i.e., 10, is equal to 50. |
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