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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:
Ratio method : Ed = `(%triangle"Q")/(%triangle"P")` :: _______ : Ed = `"Lower segment"/"Upper segment"`
- Which method of measuring elasticity is used in above diagram? (1m)
- Mention the type of elasticity at point ‘C’? (1m)
- Find out the elasticity at point ‘D’ by applying formula (2m)
Complete the correlation.
Ratio method : Ed = `(% Delta "Q")/(%Delta"P"):: "______" : Ed = ("Lower segment")/("Upper segment")`
Complete the correlation:
______ : Straight line demand curve : : Non-linear demand curve : Curved line demand curve
Ratio method: Ed = `(%Delta"Q") /(%Delta"UP")`:: ______: Ed = `("Lower segment")/ ("Upper segment")`
Complete the correlation:
Ratio method : Ed = `("%"\Delta"Q")/("%"\Delta"P")` :: ______ : Ed =`("Lower segment") /("Upper segment")`
When the price of a commodity falls by 80%, the quantity demanded increases by 100%. Find out its price elasticity of demand.
Ed = `100/80 = 1.25`
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 |
Give two examples of inelastic demand.
Give two examples of unitary elastic demand.
