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Home Calculate the price elasticity of demand for a commodity when its price increases by 25 % and quantity demanded falls from 150 units to 120 units. Question Open in App Solution Ed=percentage change in demandpercentage change in price=−30150×10025 (adsbygoogle = window.adsbygoogle || []).push({}); =−0.8Suggest Corrections 7 Similar questions Q. Price of a commodity falls from Rs 20 to Rs 15 per unit. Its demand rises from 600 units to 750 units. Calculate its price elasticity of demand. When the price of commodity A falls from Rs. 10 to Rs. 5 per unit, its quantity demanded doubles. Calculate its elasticity of demand. At what price will its quantity demanded fall by 50 per cent?Answer Verified
Hint: Calculate the elasticity of demand $ \left( {{E}_{d}} \right) $ using the definition: Complete step by step solution: Note: The value of elasticity of demand is always negative. This is because, of the two changes, the
percentage change in the quantity demanded and the percentage change in the price, one change will be positive, the other negative. When the price of a commodity falls from ₹ 10 to ₹ 5 per unit its quantity demanded doubles calculate its price elasticity of demand?It is also given that the quantity demanded (Q) doubles in value. Therefore, the elasticity of demand is Ed=−2 . Therefore, the price will be 10+2.5 = Rs. 12.5.
When price of commodity A falls from Rs 10 to Rs 5 per unit?When the price of commodity A falls from Rs. 10 to Rs. 5 per unit, its quantity demanded doubles.
When the price of a commodity falls its demand will go up likewise when the price of a commodity rises its demand will fall is known as?True. When the price of a commodity rises the demand will fall. Quantity demanded and price are inversely related this means that as the price of the goods increase the demand of that commodity decreases and vice versa.
What happens when the price of a commodity falls?Detailed Solution
The correct answer is The demand for it to increase. According to the Law of Demand: There is an inverse relationship between price and quantity demanded of a commodity i.e. when there is a fall in price, demand will increase and vice versa.
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