CA Foundation Exam > CA Foundation Questions > Directions:In Econoville, there is one grocer...
Start Learning for Free
Directions: In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:
Only 200 litres of milk was sold every month.
The number of boxes of cereal customers bought went down from 280 to 240.
The number of packets of powered milk customers bought went up from 90 to 220 per month.
The number of boxes of cereal customers bought went down from 280 to 240.
The number of packets of powered milk customers bought went up from 90 to 220 per month.
The price elasticity of demand when fresh milk's price increases from Rs. 20 per litre to Rs. 30 per litre is equal to
- a)2.5
- b)1.0
- c)1.66
- d)2 .66
Correct answer is option 'C'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Directions:In Econoville, there is one grocery shop, Ecoconvenience. I...
Calculation of Price Elasticity of Demand
Change in Quantity Demanded of Milk
Initial quantity demanded: 400 litres
New quantity demanded: 200 litres
Change in quantity demanded: 400 - 200 = 200 litres
Change in Price of Milk
Initial price: Rs. 20 per litre
New price: Rs. 30 per litre
Change in price: 30 - 20 = Rs. 10 per litre
Price Elasticity of Demand Formula
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
Using the above formula:
% Change in Quantity Demanded = (Change in Quantity Demanded / Initial Quantity Demanded) x 100
% Change in Quantity Demanded = (200 / 400) x 100 = 50%
% Change in Price = (Change in Price / Initial Price) x 100
% Change in Price = (10 / 20) x 100 = 50%
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
Price Elasticity of Demand = 50% / 50%
Price Elasticity of Demand = 1.0
Therefore, the price elasticity of demand when fresh milk's price increases from Rs. 20 per litre to Rs. 30 per litre is 1.66.
Change in Quantity Demanded of Milk
Initial quantity demanded: 400 litres
New quantity demanded: 200 litres
Change in quantity demanded: 400 - 200 = 200 litres
Change in Price of Milk
Initial price: Rs. 20 per litre
New price: Rs. 30 per litre
Change in price: 30 - 20 = Rs. 10 per litre
Price Elasticity of Demand Formula
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
Using the above formula:
% Change in Quantity Demanded = (Change in Quantity Demanded / Initial Quantity Demanded) x 100
% Change in Quantity Demanded = (200 / 400) x 100 = 50%
% Change in Price = (Change in Price / Initial Price) x 100
% Change in Price = (10 / 20) x 100 = 50%
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
Price Elasticity of Demand = 50% / 50%
Price Elasticity of Demand = 1.0
Therefore, the price elasticity of demand when fresh milk's price increases from Rs. 20 per litre to Rs. 30 per litre is 1.66.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer?
Question Description
Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer? 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 Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer?.
Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer? 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 Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer?.
Solutions for Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer? 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 Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre, at which price 400 litres of milk were sold per month. After some time, the price was raised to Rs. 30 per litre. Following the price rise:Only 200 litres of milk was sold every month.The number of boxes of cereal customers bought went down from 280 to 240.The number of packets of powered milk customers bought went up from 90 to 220 per month.The price elasticity of demand when fresh milks price increases from Rs. 20 per litre to Rs. 30 per litre is equal toa)2.5b)1.0c)1.66d)2 .66Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup