A consumer buy 200 units of a good at a price of Rs 20 per unit. Price elasticity of demand is (-)2. At what price will he be willing to purchase 300 units? Calculate

A consumer buy 200 units of a good at a price of Rs 20 per unit. Price

1.	A consumer buy 200 units of a good at a price of Rs 20 per unit. Price elasticity of demand is (-)2. At what price will he be willing to purchase 300 units? Calculate
Answer» <P> Solution :`E_(d) = (Delta Q)/(Delta P) xx (P)/(Q)` `-2 = (100)/(Delta P) xx (20)/(200)` `-2 (DeltaP) = 10` `Delta P = -5` NEW Price = Original Price `(P) + Delta P = 20 + (-) 5 = RS 15`