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प्रश्न
Consider the demand for a good. At price Rs 4, the demand for the good is 25 units. Suppose the price of the good increases to Rs 5, and as a result, the demand for the good falls to 20 units. Calculate the price elasticity.
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उत्तर
Percentage change in quantity demanded:
`% ΔQ = (Q2 - Q1)/(Q1)xx100`
`% ΔQ = (20 - 25)/(25)xx100`
`% ΔQ = (-5)/(25)xx100`
`% ΔQ = -20%`
Percentage change in price:
`% ΔP = (P2 - P1)/(P1)xx100`
`% ΔP = (5 - 4)/(4)xx100`
`% ΔP = 1/(4)xx100`
`% ΔP = 25%`
Calculating Price Elasticity of Demand:
PED = `(%ΔQ)/(%ΔP)`
PED = `(-20%)/(25%)`
PED = −0.8
संबंधित प्रश्न
A consumer spends Rs 1000 on a good priced at Rs 8 per unit. When price rises by 25 percent, the consumer continues to spend Rs 1000 on the good. Calculate the price elasticity of demand by percentage method.
A consumer spends Rs 60 on a good priced at Rs 5 per unit. When price rises by 20 percent, the consumer continues to spend Rs 60 on the good. Calculate the price elasticity of demand by percentage method.
When the price of a good falls from Rs 10 to Rs 8 per unit, its demand rises from 20 units to 24 units. What can you say about price elasticity of demand of the good through the expenditure approach?
Explain any 'two methods' of measuring price elasticity of demand.
A consumer buys 10 units of a commodity at a price of Rs. 10 per unit. He incurs an expenditure of Rs 200 on buying 20 units. Calculate price elasticity of demand by the percentage method. Comment upon the shape of demand curve based on this information.
Define or explain the following concept.
Unitary elastic demand.
Give reason or explain the following statement:
Demand for habitual goods is inelastic.
Give reason or explain the following statement:
Demand for commodity having multiple uses has elastic demand.
If quantity supplied increases by 60% due to a 50% increase in price, then elasticity of supply is ______
Identify the correctly matched pair from the items in Column A by matching them to the items in column B:
| Column A | Column B |
| 1. Increase or decrease in demand for a commodity does not cause any change in its price. | (a) Effect on supply, in the case of Perfectly Elastic Demand. |
| 2. Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant. | (b) Effect on demand, in the case of Perfectly Inelastic Supply. |
| 3. Increase or decrease in demand cause a change in the price of the commodity. Equilibrium quantity remains constant. | (c) Effect on demand, in the case of Perfectly Elastic Supply. |
| 4. Increase or decrease in demand for a commodity does not cause any change in its price. | (d) Effect on supply, in the case of Perfectly Elastic Demand. |
State with reasons whether you agree or disagree with the following statement:
The elasticity of demand gets influenced by the nature of the commodity.
Assertion (A) : A change in quantity demanded of one commodity due to a change in the price of other commodity is cross elasticity.
Reasoning (R) : Changes in consumers income leads to a change in the quantity demanded.
Price elasticity of demand is defined as the percentage change in the quantity demanded of a commodity divided by the percentage change in the price of that commodity.
When change in price is greater than the change in quantity demand it is a case of elastic demand.
When is the demand for a good said to be elastic?
What is meant by elastic demand?
What does elasticity of demand measure?
Who introduced the concept of elasticity of demand?
Which type of good typically has inelastic demand?
