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When Price of a Commodity Falls by Rs 1 per Unit, Its Quantity Demanded Rises by 3 Units. Its Price Elasticity of Demand is (−) 2. Calculate Its Quantity Demanded If the Pric - Economics

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When price of a commodity falls by Rs 1 per unit, its quantity demanded rises by 3 units. Its price elasticity of demand is (−) 2. Calculate its quantity demanded if the price before the change was Rs 10 per unit. 

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Solution

Initial Price (P)=Rs 10 

Initial Qunatity (q)=x 

`ΔP=-1` 

`Δq=3` 

`E_d=(-)2` 

`E_d= (Δq)/(Δp)xxp/q` 

`Or,-2=3/-1xx10/x` 

Or,x=15 `"units(Initial Quantity Demanded)"`

 

Concept: Factors Affecting Price Elasticity of Demand
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