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Question
With the rise in price by ₹ 5, the quantity demanded changes from 100 units to 95 units. The price elasticity of demand is (–) 1.2. Find out the price before change.
Numerical
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Solution
Given ep = (–) 1.2, ΔP = 5, Q = 100, ΔQ = 95 – 100 = –5
ep = `"ΔQ"/"ΔP" xx P/Q`
⇒ –1.2 = `(–5)/5 xx P/100`
⇒ –1.2 = `– P/100`
⇒ P = 1.2 × 100
= ₹ 120
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Chapter 22: Model Short Answer Questions - MODEL SHORT ANSWER QUESTIONS [Page 457]
