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34.A consumer rises its demand by 50% of a commodity when its price falls by 1 rupees per unit. calculate new price when price elasticity of demand is (-)2.5 ? also comment on elasticity ? Your answer Back Submit?
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34.A consumer rises its demand by 50% of a commodity when its price fa...
Given information:
- The consumer increases demand by 50% when the price falls by 1 rupee per unit.
- The price elasticity of demand is -2.5.
Calculating the price elasticity of demand:
The price elasticity of demand is calculated using the formula:
Elasticity = (% change in quantity demanded) / (% change in price)
We are given the following information:
- % change in quantity demanded = 50%
- % change in price = 1 rupee
Substituting the values into the formula:
-2.5 = (50% / 1 rupee)
Simplifying the equation:
-2.5 = 50%
Therefore, the price elasticity of demand is -2.5.
Calculating the new price:
To find the new price, we need to use the formula:
Elasticity = (% change in quantity demanded) / (% change in price)
We are given the following information:
- Elasticity = -2.5
- % change in quantity demanded = 50%
Let's assume the initial price is P rupees per unit.
Using the formula, we can rearrange it to find the % change in price:
Elasticity = (% change in quantity demanded) / (% change in price)
-2.5 = 50% / (% change in price)
Simplifying the equation:
-2.5 (% change in price) = 50%
Dividing both sides by -2.5:
% change in price = -50% / 2.5
% change in price = -20%
Therefore, the new price is the initial price minus 20% of the initial price:
New price = P - (20% of P)
New price = P - (0.2P)
New price = 0.8P
In conclusion, the new price when the price elasticity of demand is -2.5 is 0.8 times the initial price. The negative elasticity indicates that the demand is price elastic, meaning that a decrease in price leads to a proportionately larger increase in demand.
- The consumer increases demand by 50% when the price falls by 1 rupee per unit.
- The price elasticity of demand is -2.5.
Calculating the price elasticity of demand:
The price elasticity of demand is calculated using the formula:
Elasticity = (% change in quantity demanded) / (% change in price)
We are given the following information:
- % change in quantity demanded = 50%
- % change in price = 1 rupee
Substituting the values into the formula:
-2.5 = (50% / 1 rupee)
Simplifying the equation:
-2.5 = 50%
Therefore, the price elasticity of demand is -2.5.
Calculating the new price:
To find the new price, we need to use the formula:
Elasticity = (% change in quantity demanded) / (% change in price)
We are given the following information:
- Elasticity = -2.5
- % change in quantity demanded = 50%
Let's assume the initial price is P rupees per unit.
Using the formula, we can rearrange it to find the % change in price:
Elasticity = (% change in quantity demanded) / (% change in price)
-2.5 = 50% / (% change in price)
Simplifying the equation:
-2.5 (% change in price) = 50%
Dividing both sides by -2.5:
% change in price = -50% / 2.5
% change in price = -20%
Therefore, the new price is the initial price minus 20% of the initial price:
New price = P - (20% of P)
New price = P - (0.2P)
New price = 0.8P
In conclusion, the new price when the price elasticity of demand is -2.5 is 0.8 times the initial price. The negative elasticity indicates that the demand is price elastic, meaning that a decrease in price leads to a proportionately larger increase in demand.
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34.A consumer rises its demand by 50% of a commodity when its price falls by 1 rupees per unit. calculate new price when price elasticity of demand is (-)2.5 ? also comment on elasticity ? Your answer Back Submit?
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34.A consumer rises its demand by 50% of a commodity when its price falls by 1 rupees per unit. calculate new price when price elasticity of demand is (-)2.5 ? also comment on elasticity ? Your answer Back Submit? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about 34.A consumer rises its demand by 50% of a commodity when its price falls by 1 rupees per unit. calculate new price when price elasticity of demand is (-)2.5 ? also comment on elasticity ? Your answer Back Submit? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 34.A consumer rises its demand by 50% of a commodity when its price falls by 1 rupees per unit. calculate new price when price elasticity of demand is (-)2.5 ? also comment on elasticity ? Your answer Back Submit?.
34.A consumer rises its demand by 50% of a commodity when its price falls by 1 rupees per unit. calculate new price when price elasticity of demand is (-)2.5 ? also comment on elasticity ? Your answer Back Submit? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about 34.A consumer rises its demand by 50% of a commodity when its price falls by 1 rupees per unit. calculate new price when price elasticity of demand is (-)2.5 ? also comment on elasticity ? Your answer Back Submit? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 34.A consumer rises its demand by 50% of a commodity when its price falls by 1 rupees per unit. calculate new price when price elasticity of demand is (-)2.5 ? also comment on elasticity ? Your answer Back Submit?.
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