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Let Qx = 1500 Px the elasticity of demand of the good X when its price falls from $8 to $2 per unit, will be (A) (B) (C) (D) greater than one less than one equal to one can't say?
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Let Qx = 1500 Px the elasticity of demand of the good X when its price...
Elasticity of Demand when Price falls from $8 to $2 for Good X

Given:

Qx = 1500 Px

To Find:

Elasticity of Demand when Price falls from $8 to $2 for Good X

Solution:

We know that the formula for Elasticity of Demand is:
Elasticity of Demand = % Change in Quantity Demanded / % Change in Price

Let's calculate the % change in Quantity Demanded:
Initial Quantity Demanded = Q1 = 1500 P1
Final Quantity Demanded = Q2 = 1500 P2 = 1500 * 2 = 3000

% Change in Quantity Demanded = (Q2 - Q1) / Q1 * 100
% Change in Quantity Demanded = (3000 - 1500 P1) / 1500 P1 * 100

Now, let's calculate the % change in Price:
Initial Price = P1 = $8
Final Price = P2 = $2

% Change in Price = (P2 - P1) / P1 * 100
% Change in Price = ($2 - $8) / $8 * 100

% Change in Price = -75%

Now, let's substitute the values in the formula of Elasticity of Demand:
Elasticity of Demand = % Change in Quantity Demanded / % Change in Price
Elasticity of Demand = [(3000 - 1500 P1) / 1500 P1 * 100] / [-75%]

Elasticity of Demand = [(3000 - 1500 P1) / 1500 P1] * [-100/75]
Elasticity of Demand = [(3000 - 1500 P1) / 1500 P1] * [-4/3]

Elasticity of Demand = [(2 - 1) / 1] * [-4/3]
Elasticity of Demand = -4/3

Conclusion:

The elasticity of demand of the good X when its price falls from $8 to $2 per unit is less than one.
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Let Qx = 1500 Px the elasticity of demand of the good X when its price falls from $8 to $2 per unit, will be (A) (B) (C) (D) greater than one less than one equal to one can't say?
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