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Maths question in the following pic: |
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Answer» when the prise of good falls by 10%its quality demanded rises from 40units to 50 units calculate prise elasticity of demandGiven, percentage CHANGE in PRICE =(−)10%Q=150 units;Q 1 =180 units;△Q=Q 1 −Q=(180−150)units=30 unitsPercentage change in quantity demanded = Q△Q ×100= 15030 ×100=20%Price elasticity of demand (E d )=(−) Percentage change in pricePercentage change in quantity demanded =(−) −10%20% =2When demand rises from 150 to 210 units:E d =2Q=150 units;Q 1 =210 units;△Q=Q 1 −Q=(210−150)units=60 unitsPercentage change in quantity demanded = Q△Q ×100= 15060 ×100=40%Price elasticity of demand (E d )=(−) Percentage change in pricePercentage change in quantity demanded 2=(−) Percentage change in price40% Percentage change in price = 2−40% =20%Price elasticity of demand =2.Percentage FALL in price =20%. |
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