8.Price elasticity of demand of a commodity is -1. calculate the percentage change in
price that will raise the demand from 20 units to 30 units.
Dear Student,
ed = -1
Q = 20 units; Q1 = 30 units
ed = -1
Q = 20 units; Q1 = 30 units
Therefore, ∆Q= 30-20 = 10 units
% ∆Q= (10/20)x100 = 50%
ed= %∆Q / %∆P
-1 = 50 / %∆P
%∆P = -50
Therefore, a fall in the price of the commodity by 50% will raise the demand of the commodity from 20 to 30 units.
Regards
ed= %∆Q / %∆P
-1 = 50 / %∆P
%∆P = -50
Therefore, a fall in the price of the commodity by 50% will raise the demand of the commodity from 20 to 30 units.
Regards