CA Foundation Exam  >  CA Foundation Questions  >  When price of radio is Rs. 500 then quantity ... Start Learning for Free
When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand?
Most Upvoted Answer
When price of radio is Rs. 500 then quantity demanded is 100 and when ...
Calculation of Price Elasticity of Demand



  • Price of radio (P1) = Rs. 500

  • Quantity demanded (Q1) = 100

  • Price of radio (P2) = Rs. 400

  • Quantity demanded (Q2) = 150



Formula for Price Elasticity of Demand

Price Elasticity of Demand (PED) = % Change in Quantity Demanded / % Change in Price


Calculating the Percentage Change in Quantity Demanded

Percentage Change in Quantity Demanded = ((Q2 - Q1) / ((Q1 + Q2) / 2)) x 100



  • Percentage Change in Quantity Demanded = ((150 - 100) / ((100 + 150) / 2)) x 100

  • Percentage Change in Quantity Demanded = (50 / 125) x 100

  • Percentage Change in Quantity Demanded = 40%



Calculating the Percentage Change in Price

Percentage Change in Price = ((P2 - P1) / ((P1 + P2) / 2)) x 100



  • Percentage Change in Price = ((400 - 500) / ((500 + 400) / 2)) x 100

  • Percentage Change in Price = (-100 / 450) x 100

  • Percentage Change in Price = -22.22%



Calculating the Price Elasticity of Demand

Price Elasticity of Demand (PED) = % Change in Quantity Demanded / % Change in Price



  • Price Elasticity of Demand (PED) = 40% / -22.22%

  • Price Elasticity of Demand (PED) = -1.8



Interpreting the Value of Price Elasticity of Demand

The value of Price Elasticity of Demand is greater than 1, so the demand for radios is elastic. This means that a small change in price will cause a relatively larger change in the quantity demanded. Therefore, if the price of radios is decreased, the quantity demanded will increase significantly.
Community Answer
When price of radio is Rs. 500 then quantity demanded is 100 and when ...
Elasticity of demand = change in quantity/change in price
50/100= 0.5
Explore Courses for CA Foundation exam
When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand?
Question Description
When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand?.
Solutions for When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand? defined & explained in the simplest way possible. Besides giving the explanation of When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand?, a detailed solution for When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand? has been provided alongside types of When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand? theory, EduRev gives you an ample number of questions to practice When price of radio is Rs. 500 then quantity demanded is 100 and when price falls to Rs 400 demanded rises to 150. What will be value of price Elasticity of demand? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev