Market demand for a good at rupees 4 per unit is 1,000 units the price – InterviewSolution

1.	Market demand for a good at rupees 4 per unit is 1,000 units the price rises. As a result, the market demand falls by 25%. Find the new price if demand is unitary elastic.
Answer» Explanation:Price ELASTICITY of DEMAND (Ed)=ΔQΔP×PQ−1=−25ΔP×4100⇒ΔP=₹1As the quantity DEMANDED is decreasing , price will increase. It means,new price = ORIGINAL pirce (P) + Change in price (ΔP)=4+1=₹5

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