The price of a commodity decreases from 10 to 8 and the quantity demanded of it increases from 25 to 30 units, then the coefficient of price elasticity will be______.

- a)1.00
- b)-1.00
- c)1.5
- d)-1.5

Correct answer is option 'B'. Can you explain this answer?

Related Test: Test: Theory Of Demand- 3

By
Khushboo Khushi
·
Jun 22, 2018 ·CA Foundation

6 Answers

Divine Novice
answered
Aug 05, 2018

But I guess negative sign just indicate the negative relationship

Samiksha
answered
Jun 23, 2018

Well lets solve this step by step.. As it is given in the question original quantity =25 units, new quantity =30 units, so change in quantity =30-25=5 units .. Original price =Rs 10, new price =Rs 8..so,Change in price =8-10=Rs -2...nw price elasticity of demand =change in quantity demand /change in price *original price /original quantity =5/-2*10/25=0 (-) 1..hence Ed =(-) 1 i.e demand is unitary elastic

Alia Athar
answered
Jul 20, 2019

We never use negative sign in elasticity of demand... answer will be +1

Abhishek Kumar
answered
Jun 23, 2018

The price elasticity will be - 1,becoz we have DeltaQ=30-25 (Q1-Q2) =5 DeltaP=8-10(p1-p2)=-2 Or p1=10 'q1=25 here formula = Deltaq/deltap *p1/q1 5/-2*10/25=-1 the price elasticity will be unitary elastic

This discussion on The price of a commodity decreases from 10 to 8 and the quantity demanded of it increases from 25 to 30 units, then the coefficient of price elasticity will be______.a)1.00b)-1.00c)1.5d)-1.5Correct answer is option 'B'. Can you explain this answer? is done on EduRev Study Group by CA Foundation Students. The Questions and
Answers of The price of a commodity decreases from 10 to 8 and the quantity demanded of it increases from 25 to 30 units, then the coefficient of price elasticity will be______.a)1.00b)-1.00c)1.5d)-1.5Correct answer is option 'B'. Can you explain this answer? are solved by group of students and teacher of CA Foundation, which is also the largest student
community of CA Foundation. If the answer is not available please wait for a while and a community member will probably answer this
soon. You can study other questions, MCQs, videos and tests for CA Foundation on EduRev and even discuss your questions like
The price of a commodity decreases from 10 to 8 and the quantity demanded of it increases from 25 to 30 units, then the coefficient of price elasticity will be______.a)1.00b)-1.00c)1.5d)-1.5Correct answer is option 'B'. Can you explain this answer? over here on EduRev! Apart from being the largest CA Foundation community, EduRev has the largest solved
Question bank for CA Foundation.

Ask a question

- Double commodity case
Video | 12:55 min

- ELASTICITY
Doc | 62 Pages

- Elasticity of Demand & Price Elasticity
Doc | 15 Pages

- Deflation despite increases in money supply
Video | 04:04 min

- Consumer's Equilibrium (1 Commodity Case)
Video | 21:25 min

Upgrade to Infinity