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प्रश्न
A consumer purchased 10 units of a commodity when its price was ₹ 5 per unit. He purchases 12 units of the commodity when price falls to ₹ 4 per unit. Calculate the price elasticity of demand for the commodity.
उत्तर
To calculate the price elasticity of demand (Ed), we use the following formula:
Price Elasticity of Demand (Ed) = `("Percentage Change in Quantity Demanded")/("Percentage Change in Price")`
Calculate the Percentage Change in Quantity Demanded:
Initial Quantity Demanded (Q1): 10 units
New Quantity Demanded (Q2): 12 units
Percentage Change in Quantity Demanded = `(Q2-Q1)/(Q1)xx100`
= `(12-10)/10xx100 = 2/10xx100=20%`
Calculate the Percentage Change in Price:
Initial Price (P1): ₹5 per unit
New Price (P2): ₹4 per unit
Percentage Change in Price = `(P2-P1)/(P1)xx100`
= `(4-5)/5xx100=(-1)/5xx100=-20%`
Calculate the Price Elasticity of Demand:
Ed = `(20%)/(-20%)=-1`
Since elasticity is often expressed as a positive number (ignoring the sign), the price elasticity of demand is 1.
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संबंधित प्रश्न
Complete the correlation:
Straight-line demand curve : Linear demand curve :: _______ : non-linear demand curve.
Assertion (A): Total expenditure method measures elasticity of demand at a given point on the demand curve.
Reasoning (R): Total expenditure refers to the product of price and quantity demanded.
Complete the correlation :
Ratio method : Ed = `(%ΔQ)/(%ΔP)` :: _____ : Ed = `"Lower segment"/"Upper segment"`
Complete the correlation:
Ratio method : Ed = `(%triangle"Q")/(%triangle"P")` :: _______ : Ed = `"Lower segment"/"Upper segment"`
The coefficient of price elasticity of a good is 0.8, its demand will said to be ______.
As a result of a 5% increase in price, the demand for commodity X increases by 12%. The price elasticity of demand will be ______.
Study the table given below and state whether demand is elastic or inelastic. Give reasons for your answer.
| Price in (₹) | Total outlay (₹) |
| 5 | 25 |
| 3 | 18 |
How do we determine whether the demand for a particular commodity is elastic or inelastic?
With the help of a diagram, explain the condition when EP < 1.
From the following state whether the price elasticity of demand is inelastic, relatively elastic, highly elastic or highly inelastic. Give reasons to support your answer.
Demand for precious stones and costly jewellery
