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when the price of a commodity is Rs,10 its quantity demand 200 units find the change in quantity demand when its price fall to Rs,5 the elasticity demand is given as 1.5?
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?when the price of a commodity is Rs,10 its quantity demand 200 units ...
Explanation
The given information is:
- Price of a commodity = Rs.10
- Quantity demand at this price = 200 units
- Price falls to Rs. 5
- Elasticity of demand = 1.5
Calculation of Percentage Change in Price
The percentage change in price can be calculated by using the following formula:
Percentage change in price = ((New price - Old price) / Old price) x 100
Here, the old price is Rs.10 and the new price is Rs.5. Substituting these values in the above formula, we get:
Percentage change in price = ((5 - 10) / 10) x 100 = -50%
Calculation of Percentage Change in Quantity
The percentage change in quantity can be calculated by using the following formula:
Percentage change in quantity = Elasticity of demand x Percentage change in price
Here, the elasticity of demand is given as 1.5 and the percentage change in price is -50%. Substituting these values in the above formula, we get:
Percentage change in quantity = 1.5 x (-50) = -75%
Interpretation of the Result
The result obtained from the above calculation indicates that the quantity demand for the commodity is elastic. This means that a small change in price leads to a relatively larger change in quantity demanded. In this case, a 50% decrease in price has resulted in a 75% increase in quantity demanded. Therefore, the demand for this commodity is highly responsive to changes in price.
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?when the price of a commodity is Rs,10 its quantity demand 200 units ...
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?when the price of a commodity is Rs,10 its quantity demand 200 units find the change in quantity demand when its price fall to Rs,5 the elasticity demand is given as 1.5?
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?when the price of a commodity is Rs,10 its quantity demand 200 units find the change in quantity demand when its price fall to Rs,5 the elasticity demand is given as 1.5? for Humanities/Arts 2024 is part of Humanities/Arts preparation. The Question and answers have been prepared according to the Humanities/Arts exam syllabus. Information about ?when the price of a commodity is Rs,10 its quantity demand 200 units find the change in quantity demand when its price fall to Rs,5 the elasticity demand is given as 1.5? covers all topics & solutions for Humanities/Arts 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ?when the price of a commodity is Rs,10 its quantity demand 200 units find the change in quantity demand when its price fall to Rs,5 the elasticity demand is given as 1.5?.
?when the price of a commodity is Rs,10 its quantity demand 200 units find the change in quantity demand when its price fall to Rs,5 the elasticity demand is given as 1.5? for Humanities/Arts 2024 is part of Humanities/Arts preparation. The Question and answers have been prepared according to the Humanities/Arts exam syllabus. Information about ?when the price of a commodity is Rs,10 its quantity demand 200 units find the change in quantity demand when its price fall to Rs,5 the elasticity demand is given as 1.5? covers all topics & solutions for Humanities/Arts 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for ?when the price of a commodity is Rs,10 its quantity demand 200 units find the change in quantity demand when its price fall to Rs,5 the elasticity demand is given as 1.5?.
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