To calculate the elasticity of demand of the good X, we need to use the formula:

Elasticity of demand = percentage change in quantity demanded / percentage change in price

In this case, the price of the good X has fallen from $8 to $2 per unit. This represents a percentage change in price of:

Percentage change in price = (new price - old price) / old price x 100%
Percentage change in price = ($2 - $8) / $8 x 100%
Percentage change in price = -75%

Now, we need to calculate the percentage change in quantity demanded. To do this, we need to use the demand function:

Qx = 1500/Px

When the price of the good X was $8, the quantity demanded was:

Q1 = 1500/8
Q1 = 187.5

When the price of the good X fell to $2, the quantity demanded was:

Q2 = 1500/2
Q2 = 750

The percentage change in quantity demanded is:

Percentage change in quantity demanded = (new quantity demanded - old quantity demanded) / old quantity demanded x 100%
Percentage change in quantity demanded = (750 - 187.5) / 187.5 x 100%
Percentage change in quantity demanded = 300%

Therefore, the elasticity of demand of the good X is:

Elasticity of demand = percentage change in quantity demanded / percentage change in price
Elasticity of demand = 300% / -75%
Elasticity of demand = -4


The elasticity of demand for the good X is -4. This means that the demand for the good X is highly elastic. A 1% decrease in price will result in a 4% increase in the quantity demanded. Similarly, a 1% increase in price will result in a 4% decrease in the quantity demanded. This suggests that the consumers are very sensitive to changes in the price of the good X. The producer should be careful while deciding the price of the good X. They should optimize the price so that they can maximize their profit.