14. When price of a good rises from 5 per unit to 6 per unit, its dema

1.	14. When price of a good rises from 5 per unit to 6 per unit, its demand falls from 20 units to 10 units.Calculate elasticity of demand.
Answer» <P>ANSWER: GIVEN, P=Rs.20; P 1 =Rs.23; △P=P 1 −P=Rs.23−Rs.20=Rs.3 Percentage change in price = P △P ×100= 20 3 ×=15 per cent Percentage change in quantity demanded =(−)30 per cent Price elasticity of demand (E d )=(−) Percentagechangeinprice Percentagechangein quantitydemanded =(−) 15% −30% = 2 Price ELASTICTY of demand =2.

14. When price of a good rises from 5 per unit to 6 per unit, its demand falls from 20 units to 10 units.Calculate elasticity of demand.

Answer»

GIVEN, P=Rs.20; P

=Rs.23;

△P=P

−P=Rs.23−Rs.20=Rs.3

Percentage change in price =

△P

×100=

×=15 per cent

Percentage change in quantity demanded =(−)30 per cent

Price elasticity of demand (E

)=(−)

Percentagechangeinprice

Percentagechangein quantitydemanded

=(−)

15%

−30%

= 2

Price ELASTICTY of demand =2.