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Consumer buys 18 units of a good at a price of Rs 9 per unit. The price elasticity of demand for the good is (-)1. How many units the consumer will buy at a price of Rs 10 per unit? Calculate.?
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Consumer buys 18 units of a good at a price of Rs 9 per unit. The pric...
Calculation of Quantity Demanded at a Price of Rs. 10 per unit:

Given data:
- Quantity demanded at a price of Rs. 9 per unit = 18 units
- Price elasticity of demand = (-)1

Determining the Change in Price:
To calculate the quantity demanded at a price of Rs. 10 per unit, we first need to determine the change in price.

Change in price = New price - Old price
Change in price = 10 - 9
Change in price = 1

Determining the Elasticity of Demand:
The price elasticity of demand is given as (-)1, which means that the demand for the good is elastic.

Determining the Percentage Change in Quantity Demanded:
To calculate the new quantity demanded at a price of Rs. 10 per unit, we need to determine the percentage change in quantity demanded.

Percentage change in quantity demanded = Price elasticity of demand x Percentage change in price

Percentage change in price = (Change in price / Old price) x 100
Percentage change in price = (1 / 9) x 100
Percentage change in price = 11.11%

Percentage change in quantity demanded = (-)1 x 11.11%
Percentage change in quantity demanded = (-)11.11%

Determining the New Quantity Demanded:
Now, we can calculate the new quantity demanded at a price of Rs. 10 per unit using the following formula:

New quantity demanded = Old quantity demanded x (1 + Percentage change in quantity demanded)

New quantity demanded = 18 x (1 - 0.1111)
New quantity demanded = 15.99 units

Conclusion:
Therefore, the consumer will buy 15.99 units of the good at a price of Rs. 10 per unit. This decrease in quantity demanded is due to the elastic nature of demand for the good, which means that a small increase in price results in a relatively larger decrease in quantity demanded.
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Consumer buys 18 units of a good at a price of Rs 9 per unit. The price elasticity of demand for the good is (-)1. How many units the consumer will buy at a price of Rs 10 per unit? Calculate.?
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