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A Consumer Buys 18 Units of a Good at a Price of Rs 9 per Unit. the Price Elasticity of Demand for the Good is (–) 1. How Many Units the Consumer Will Buy at a Price of Rs 10 per Unit? Calculate. - Economics

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A consumer buys 18 units of a good at a price of Rs 9 per unit. The price elasticity of demand for the good is (–) 1. How many units the consumer will buy at a price of Rs 10 per unit? Calculate.

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Solution

Given that

Q1= 18

Q2= ?

P1 = Rs9

P2 = Rs10

Ed = -1

`E_d=(DeltaQ)/Qxxp/(DeltaP)`

`-1=(Q_2-Q_1)/Q_1xxP/(P_2-P_1)`

`-1=((Q_2-18))/18xx9/(10-9)`

`-1=(Q_2-18)/18xx9/1`

-2=Q2-18

-2+18=Q2

Q2=16

Therefore, the consumer will buy 16 units of the good at a price of Rs 10.

 

Concept: Elasticity of Demand
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