Commodity Information:
Given:
- Commodity: Not specified
- Initial quantity demanded (Q): 60 units
- Percentage change in price (ΔP/P): 2.0
- Price elasticity of demand (PED): -0.5

Understanding Price Elasticity of Demand:
Price elasticity of demand (PED) measures the responsiveness of quantity demanded to a change in price. It helps in determining whether a commodity is elastic (PED > 1), inelastic (PED < 1),="" or="" unit="" elastic="" (ped="" />

Calculating Quantity Demand:
The formula for calculating the percentage change in quantity demanded is:
(% change in quantity demanded) = PED x (% change in price)

Given ΔP/P = 2.0 and PED = -0.5, we can substitute these values into the formula to find the percentage change in quantity demanded:

(% change in quantity demanded) = -0.5 x 2.0 = -1.0

This means that for a 2% decrease in price, the quantity demanded will decrease by 1%.

To calculate the new quantity demanded after the fall in price, we can use the following formula:

New Quantity Demanded = Initial Quantity Demanded + (% change in quantity demanded x Initial Quantity Demanded)

Substituting the values, we get:

New Quantity Demanded = 60 + (-1.0 x 60) = 60 - 0.6 = 59.4 units

Explanation:
The initial quantity demanded is 60 units. With a price elasticity of demand of -0.5 and a 2% decrease in price, the percentage change in quantity demanded is -1.0. This means that for every 1% decrease in price, the quantity demanded will decrease by 0.5%.

Using the formula to calculate the new quantity demanded, we find that the quantity demanded after the fall in price is approximately 59.4 units. This indicates that the decrease in price leads to a slight decrease in quantity demanded.

It's important to note that the responsiveness of quantity demanded to a change in price depends on the price elasticity of demand. In this case, with a price elasticity of demand of -0.5, the commodity is relatively inelastic, meaning that the change in quantity demanded is less responsive to changes in price.