Elasticity of demand numerical ELASTICITY OF DEMAND THE

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Elasticity of demand numerical

Elasticity of demand numerical

ELASTICITY OF DEMAND THE RESPONSIVENESS OF CHANGE IN DEMAND DUE TO CHANGE IN PRICE.

ELASTICITY OF DEMAND THE RESPONSIVENESS OF CHANGE IN DEMAND DUE TO CHANGE IN PRICE. METHODS OF MEASUREMENT OF ELASTICITY OF DEMAND ü PERCENTAGE METHOD ü EXPENDITURE METHOD ü GEOMETRIC METHOD

Elasticity of demand numerical The quantity demanded of a commodity at a price of

Elasticity of demand numerical The quantity demanded of a commodity at a price of Rs. 8 per unit is 500 units. Its price falls to Rs. 6 and as a result its quantity demanded rises to 600 units. Calculate its price elasticity of demand. Solution:

Elasticity of demand numerical At a price of Rs. 6 per unit , a

Elasticity of demand numerical At a price of Rs. 6 per unit , a consumer buys 50 units of a good. The price elasticity of demand is ( -)2. At what price will the consumer buy 100 units? Solution: P = Rs. 6 Q = 50 ∆Q =100 ∆P = X New price P- ∆P = 6 - 3 Rs. 3

Elasticity of demand numerical At a price of Rs. 20 per unit, the quantity

Elasticity of demand numerical At a price of Rs. 20 per unit, the quantity demanded of a commodity is 300 units. If price falls by 10%, its quantity demanded rises by 60 units. Calculate its price elasticity of demand.

Elasticity of demand numerical The price elasticity is 0. 5. The percentage change in

Elasticity of demand numerical The price elasticity is 0. 5. The percentage change in quantity is 4. What will be the percentage change in price? Answer:

Elasticity of demand numerical Price elasticity of demand of a good is (-1). At

Elasticity of demand numerical Price elasticity of demand of a good is (-1). At a given price the consumer buys 60 units of the good. How many units will the consumer buy if the price falls by 10 percent? (CBSE 2008) Percentage change in demand=10% New demand = Q + 10% OF Q = 60 + 10%OF 60 = 60 +6 = 66

Elasticity of demand numerical A consumer spends Rs. 250 on a good when its

Elasticity of demand numerical A consumer spends Rs. 250 on a good when its price is Rs. 5 per unit. When the price rises to Rs. 6 per unit, he spends Rs. 240. Find price elasticity of demand by percentage method. Price Total expenditure Demand 5 6 250 240 50 40

Positive elasticity of demand is given Q. The price elasticity of demand for a

Positive elasticity of demand is given Q. The price elasticity of demand for a commodity is 2. A household demand is 40 units Of the commodity when its price is Rs. 5 per unit. How many units of the commodity Will the household demand when its price rises to Rs. 6 units. Solution : E DQ D = DP 2= ´ Price(Rs. ) Quality(Units) 5 40 6 x P Q 40 -x x ____ 5 1 40 2 40 -x ___ = ____ 1 8 16=40 -x X = 40 -16 X= 24 Ans Hence new demand is 24 units

Negative elasticity of demand is given Q. A consumer buys 160 units of good

Negative elasticity of demand is given Q. A consumer buys 160 units of good at a price of Rs. 8 per units. Price price falls to Rs. 6 per units. How much quantity will a consumer buy at new when price Elasticity of demand (-) 2. Solution : E DQ D = DP ´ Price(Rs. ) Quality(Units) 8 160 6 x P Q 8 ∆Q ____ x -2= -2 160 -2 = ∆Q =- 40 ∆Q = 40 x 2 = 80 Hence new demand will be 160 + 80 =240 Units.

Elasticity of demand T E METHOD Δ IN PRICE Rise Fall Δ IN TE

Elasticity of demand T E METHOD Δ IN PRICE Rise Fall Δ IN TE Fall Rise Ed Ed Rise Fall RISE Fall Ed Rise No change Ed Fall

Elasticity of demand total Expenditure method numerical Price of a good falls from Rs.

Elasticity of demand total Expenditure method numerical Price of a good falls from Rs. 5 to Rs. 4 per unit. As a result, its demand rises from 100 units to 125 units. Find out price elasticity of demand by total outlay method. Price (Rs. ) Demand (units) Total expenditure (Rs. ) 5 100 500 4 125 500 Here total expenditure remains constant with a fall in price. So elasticity of Demand is equal to one ED =1

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