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Price elasticity of demand of a good is -1 at a given price the consumer buys 60 units of the good how many unit will the consumer by if the price falls by 10%?
Most Upvoted Answer
Price elasticity of demand of a good is -1 at a given price the consum...
Price Elasticity of Demand
Price elasticity of demand is a measure of the responsiveness of the quantity demanded of a good to a change in its price.
Calculation
Given that the price elasticity of demand of a good is -1 and the consumer buys 60 units of the good at a given price:
- Price elasticity of demand = (% change in quantity demanded) / (% change in price)
- -1 = (% change in quantity demanded) / (-10%)
- % change in quantity demanded = 10%
Therefore, if the price falls by 10%, the quantity demanded will increase by 10%.
Answer
The consumer will buy:
- 60 units x (1 + 10%) = 66 units
Therefore, if the price falls by 10%, the consumer will buy 66 units of the good.
Community Answer
Price elasticity of demand of a good is -1 at a given price the consum...
Let elasticity be e , so e=-1
Original case ,
price =x and quantity =60
New case ,
price = x - 10% of x = x/10 and
quantity = 60 - y
formula ,
e = ∆q/q × p/∆p
= (60-y)/60 × x/(x/10)
-1 = (1- y/60) × 10
-1/10 = 1 - y/60
-0.1 + y/60 = 1
y/60 = 1 + 0.1
y/60 = 1.1
y = 1.1 × 60
= 11 × 6
= 66
Therefore the new quantity will be 66 units.
( We can verify our answer as ,
when price falls demand expands ,
so with a fall in price the quantity has risen. 66>60 ).
Original case ,
price =x and quantity =60
New case ,
price = x - 10% of x = x/10 and
quantity = 60 - y
formula ,
e = ∆q/q × p/∆p
= (60-y)/60 × x/(x/10)
-1 = (1- y/60) × 10
-1/10 = 1 - y/60
-0.1 + y/60 = 1
y/60 = 1 + 0.1
y/60 = 1.1
y = 1.1 × 60
= 11 × 6
= 66
Therefore the new quantity will be 66 units.
( We can verify our answer as ,
when price falls demand expands ,
so with a fall in price the quantity has risen. 66>60 ).
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Price elasticity of demand of a good is -1 at a given price the consumer buys 60 units of the good how many unit will the consumer by if the price falls by 10%? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Price elasticity of demand of a good is -1 at a given price the consumer buys 60 units of the good how many unit will the consumer by if the price falls by 10%? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Price elasticity of demand of a good is -1 at a given price the consumer buys 60 units of the good how many unit will the consumer by if the price falls by 10%?.
Price elasticity of demand of a good is -1 at a given price the consumer buys 60 units of the good how many unit will the consumer by if the price falls by 10%? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Price elasticity of demand of a good is -1 at a given price the consumer buys 60 units of the good how many unit will the consumer by if the price falls by 10%? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Price elasticity of demand of a good is -1 at a given price the consumer buys 60 units of the good how many unit will the consumer by if the price falls by 10%?.
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