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Directions: In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre. At this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.
This rise in price led to the following:
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.
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.
Q. What can be said about the price elasticity of demand for fresh milk?
- a)It is perfectly elastic.
- b)It is elastic.
- c)It is perfectly inelastic.
- d)It is inelastic.
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
Directions:In Econoville, there is one grocery shop, Ecoconvenience. I...
Explanation:
Price Elasticity of Demand: It measures the responsiveness of the quantity demanded of a good to a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.
Elastic Demand: When the percentage change in quantity demanded is greater than the percentage change in price, demand is said to be elastic. In other words, consumers are very responsive to changes in price.
Inelastic Demand: When the percentage change in quantity demanded is less than the percentage change in price, demand is said to be inelastic. In other words, consumers are not very responsive to changes in price.
Calculation of Price Elasticity of Demand for Fresh Milk:
Percentage change in quantity demanded = [(New Quantity Demanded - Old Quantity Demanded) / Old Quantity Demanded] x 100
= [(200 - 400) / 400] x 100
= -50%
Percentage change in price = [(New Price - Old Price) / Old Price] x 100
= [(30 - 20) / 20] x 100
= 50%
Price Elasticity of Demand = Percentage change in quantity demanded / Percentage change in price
= (-50%) / (50%)
= -1
Interpretation: The price elasticity of demand for fresh milk is -1, which means that a 1% increase in price leads to a 1% decrease in quantity demanded. Therefore, demand for fresh milk is elastic.
Price Elasticity of Demand: It measures the responsiveness of the quantity demanded of a good to a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.
Elastic Demand: When the percentage change in quantity demanded is greater than the percentage change in price, demand is said to be elastic. In other words, consumers are very responsive to changes in price.
Inelastic Demand: When the percentage change in quantity demanded is less than the percentage change in price, demand is said to be inelastic. In other words, consumers are not very responsive to changes in price.
Calculation of Price Elasticity of Demand for Fresh Milk:
Percentage change in quantity demanded = [(New Quantity Demanded - Old Quantity Demanded) / Old Quantity Demanded] x 100
= [(200 - 400) / 400] x 100
= -50%
Percentage change in price = [(New Price - Old Price) / Old Price] x 100
= [(30 - 20) / 20] x 100
= 50%
Price Elasticity of Demand = Percentage change in quantity demanded / Percentage change in price
= (-50%) / (50%)
= -1
Interpretation: The price elasticity of demand for fresh milk is -1, which means that a 1% increase in price leads to a 1% decrease in quantity demanded. Therefore, demand for fresh milk is elastic.
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Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre. At this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. Can you explain this answer?
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Directions:In Econoville, there is one grocery shop, Ecoconvenience. It used to sell fresh milk at Rs. 20 per litre. At this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. 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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. 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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. 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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. 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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. 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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. 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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. 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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. 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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. 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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. 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 this price, 400 litres of milk was sold per month. After some time, the price was raised to Rs. 30 per litre.This rise in price led to the following: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.Q. What can be said about the price elasticity of demand for fresh milk?a)It is perfectly elastic.b)It is elastic.c)It is perfectly inelastic.d)It is inelastic.Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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