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If delta P/ P =0.2 and price elasticity is -2 calculate percentage fall in demand also calculate original expenditure if new expenditure is 180 at price of 6?
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If delta P/ P =0.2 and price elasticity is -2 calculate percentage fal...
Calculation of Percentage Fall in Demand:
The formula to calculate price elasticity of demand is:
Price Elasticity of Demand (Ep) = (Percentage Change in Quantity Demanded / Percentage Change in Price)
Given that the price elasticity of demand is -2, we can use this formula to find the percentage change in quantity demanded.
Ep = -2
Percentage Change in Quantity Demanded / Percentage Change in Price = -2
We are given that the percentage change in price (delta P/P) is 0.2. To find the percentage change in quantity demanded, we can rearrange the formula as follows:
Percentage Change in Quantity Demanded = Ep * Percentage Change in Price
Percentage Change in Quantity Demanded = -2 * 0.2 = -0.4
Therefore, the percentage fall in demand is 0.4 or 40%.
Calculation of Original Expenditure:
To calculate the original expenditure, we need to know the original price and the original quantity demanded. We are given the new expenditure, which is $180, and the price at which it is calculated, which is $6.
The formula to calculate expenditure is:
Expenditure = Price * Quantity Demanded
Let's assume the original quantity demanded is Q1 and the original price is P1.
New Expenditure = $180
Price = $6
Using the formula, we have:
New Expenditure = Price * Quantity Demanded
$180 = $6 * Quantity Demanded
To find the original expenditure, we need to find the original quantity demanded. Rearranging the formula, we have:
Original Quantity Demanded = New Expenditure / Price
Original Quantity Demanded = $180 / $6
Original Quantity Demanded = 30
Now, we can calculate the original expenditure using the original quantity demanded and the original price:
Original Expenditure = Price * Original Quantity Demanded
Original Expenditure = $6 * 30
Original Expenditure = $180
Therefore, the original expenditure is $180.
In summary, the percentage fall in demand is 40% and the original expenditure is $180.
The formula to calculate price elasticity of demand is:
Price Elasticity of Demand (Ep) = (Percentage Change in Quantity Demanded / Percentage Change in Price)
Given that the price elasticity of demand is -2, we can use this formula to find the percentage change in quantity demanded.
Ep = -2
Percentage Change in Quantity Demanded / Percentage Change in Price = -2
We are given that the percentage change in price (delta P/P) is 0.2. To find the percentage change in quantity demanded, we can rearrange the formula as follows:
Percentage Change in Quantity Demanded = Ep * Percentage Change in Price
Percentage Change in Quantity Demanded = -2 * 0.2 = -0.4
Therefore, the percentage fall in demand is 0.4 or 40%.
Calculation of Original Expenditure:
To calculate the original expenditure, we need to know the original price and the original quantity demanded. We are given the new expenditure, which is $180, and the price at which it is calculated, which is $6.
The formula to calculate expenditure is:
Expenditure = Price * Quantity Demanded
Let's assume the original quantity demanded is Q1 and the original price is P1.
New Expenditure = $180
Price = $6
Using the formula, we have:
New Expenditure = Price * Quantity Demanded
$180 = $6 * Quantity Demanded
To find the original expenditure, we need to find the original quantity demanded. Rearranging the formula, we have:
Original Quantity Demanded = New Expenditure / Price
Original Quantity Demanded = $180 / $6
Original Quantity Demanded = 30
Now, we can calculate the original expenditure using the original quantity demanded and the original price:
Original Expenditure = Price * Original Quantity Demanded
Original Expenditure = $6 * 30
Original Expenditure = $180
Therefore, the original expenditure is $180.
In summary, the percentage fall in demand is 40% and the original expenditure is $180.
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If delta P/ P =0.2 and price elasticity is -2 calculate percentage fall in demand also calculate original expenditure if new expenditure is 180 at price of 6?
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If delta P/ P =0.2 and price elasticity is -2 calculate percentage fall in demand also calculate original expenditure if new expenditure is 180 at price of 6? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about If delta P/ P =0.2 and price elasticity is -2 calculate percentage fall in demand also calculate original expenditure if new expenditure is 180 at price of 6? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If delta P/ P =0.2 and price elasticity is -2 calculate percentage fall in demand also calculate original expenditure if new expenditure is 180 at price of 6?.
If delta P/ P =0.2 and price elasticity is -2 calculate percentage fall in demand also calculate original expenditure if new expenditure is 180 at price of 6? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about If delta P/ P =0.2 and price elasticity is -2 calculate percentage fall in demand also calculate original expenditure if new expenditure is 180 at price of 6? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If delta P/ P =0.2 and price elasticity is -2 calculate percentage fall in demand also calculate original expenditure if new expenditure is 180 at price of 6?.
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