CA Foundation Exam > CA Foundation Questions > The price elasticity of demand when the price...
Start Learning for Free
The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to?
Most Upvoted Answer
The price elasticity of demand when the price of X decrease s From 40 ...
Price Elasticity of Demand
The price elasticity of demand measures the responsiveness of quantity demanded to a change in price. It is calculated by dividing the percentage change in quantity demanded by the percentage change in price.
Calculation
Using the midpoint formula:
Price elasticity of demand = (% change in quantity demanded) / (% change in price) x (average price / average quantity)
Let's assume that the original price of X is 40 per piece and the new price is 20 per piece.
The percentage change in price is:
(New price - Original price) / Average price x 100%
= (20 - 40) / ((20 + 40) / 2) x 100%
= -50%
The average price is:
(New price + Original price) / 2
= (20 + 40) / 2
= 30
The percentage change in quantity demanded is not given. Therefore, we cannot calculate the price elasticity of demand with the information provided.
Interpretation
The price elasticity of demand can be classified into three categories:
- Elastic demand (PED > 1)
- Inelastic demand (PED < />
- Unit elastic demand (PED = 1)
When the price elasticity of demand is elastic, a change in price will cause a proportionately larger change in quantity demanded. In contrast, when the price elasticity of demand is inelastic, a change in price will cause a proportionately smaller change in quantity demanded. When the price elasticity of demand is unit elastic, a change in price will cause an equal proportionate change in quantity demanded.
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
|
|
Top Courses for CA FoundationView all
The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to?
Question Description
The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to? 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 The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to?.
The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to? 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 The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to?.
Solutions for The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to? 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 The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to? defined & explained in the simplest way possible. Besides giving the explanation of
The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to?, a detailed solution for The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to? has been provided alongside types of The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to? theory, EduRev gives you an
ample number of questions to practice The price elasticity of demand when the price of X decrease s From 40 per piece to 20 per piece will be equal to? 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
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup