CBSE (Arts) Class 12CBSE
Share
Notifications

View all notifications
Books Shortlist
Your shortlist is empty

Solution for A 5 Percent Fall in the Price of a Good Raises Its Demand from 300 Units to 318 Units. Calculate Its Price Elasticity of Demand. - CBSE (Arts) Class 12 - Economics

Login
Create free account


      Forgot password?

Question

A 5 percent fall in the price of a good raises its demand from 300 units to 318 units. Calculate its price elasticity of demand.

 

Solution

Given, the initial quantity Q1 = 300
New quantity Q2 = 318
So, ΔQ = 310 - 300 = 18
Now, percentage fall in price =`(ΔP)/Pxx100` = (-)5%
We know,
`E_d=(-)((ΔQ)/Qxx100)/((ΔP)/Pxx100)=(-)(18/300xx100)/((-)5)=(-) 6/((-)5)=1.2`
Thus, price elasticity of demand is 1.2

  Is there an error in this question or solution?
Solution A 5 Percent Fall in the Price of a Good Raises Its Demand from 300 Units to 318 Units. Calculate Its Price Elasticity of Demand. Concept: Factors Affecting Price Elasticity of Demand.
S
View in app×