Advertisements
Advertisements
Question
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.
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.
APPEARS IN
RELATED QUESTIONS
Income elasticity of demand for inferior goods is negative.
The price elasticity of demand for a good is - 0.4. If its price increases by 5 percent, by what percentage will its demand fall? Calculate.
A consumer buys 30 units of a good at a price of the Rs10per unit. The price elasticity of demand for the good is (-) 1. How many units will the consumer buy at a price of Rs 9 per unit? Calculate.
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?
Price elasticity of demand of a good is (-) 1. Calculate the percentage change in price that will raise the demand from 20 units to 30 units.
Write short notes on the Proportional method of measuring the elasticity of demand.
Write short note on:
factors determining elasticity of demand .
What is the elasticity of demand?
Give reasons or explain the following statements
Demand for basic necessities is inelastic.
State whether the following statements are TRUE or FALSE :
The demand of foodgrains is inelastic.
Consider the demand curve D(p) = 10 − 3p. What is the elasticity at price `5/3` ?
Fill in the blank with appropriate alternatives given below:
Income elasticity of demand for inferior goods is __________.
Fill in the blank with appropriate alternatives given below:
Perfectly elastic demand curve is ________________.
Give reason or explain the following statement:
Demand for habitual goods is inelastic.
Define price elasticity of demand.
State whether the following statement is true or false. Give valid reasons in support of your answer.
Luxury goods often have lower price elasticity of demand.
Give economic term:
Elasticity resulting from infinite change in quantity demanded.
- Assertion (A): Elasticity of demand explains that one variable is influenced by another variable.
- Reasoning (R): The concept of elasticity of demand indicates the effect of price and changes in other factors on demand.
mention any two examples of composite demand.
