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If price elasticity of demand for wheat is equal to unity and a household demands 40kg of wheat when the price is Rs 1 per kg . At what price will the household demand 36kg of wheat ?
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If price elasticity of demand for wheat is equal to unity and a househ...

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Introduction:
Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. When the price elasticity of demand is equal to unity, it means that a 1% change in price leads to a 1% change in quantity demanded. In this case, we need to determine the price at which a household will demand 36kg of wheat, given that they demand 40kg of wheat when the price is Rs 1 per kg.

Step 1: Calculate the initial price elasticity of demand:
To calculate the initial price elasticity of demand, we use the formula:
Price elasticity of demand = (% change in quantity demanded) / (% change in price)

Since the price elasticity of demand is equal to unity, it implies that the percentage change in quantity demanded is equal to the percentage change in price.

Step 2: Calculate the percentage change in price:
To find the percentage change in price, we use the formula:
Percentage change in price = (New price - Initial price) / Initial price * 100

Step 3: Calculate the new price:
Given that the household demands 40kg of wheat when the price is Rs 1 per kg, we can use the percentage change in price calculated in the previous step to find the new price.

Step 4: Calculate the quantity demanded at the new price:
We know that the household will demand 36kg of wheat at the new price.

Conclusion:
Therefore, the price at which the household will demand 36kg of wheat can be calculated by following the above steps. By using the initial price and quantity demanded, along with the price elasticity of demand, we can determine the new price at which the desired quantity will be demanded.
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If price elasticity of demand for wheat is equal to unity and a household demands 40kg of wheat when the price is Rs 1 per kg . At what price will the household demand 36kg of wheat ?
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If price elasticity of demand for wheat is equal to unity and a household demands 40kg of wheat when the price is Rs 1 per kg . At what price will the household demand 36kg of wheat ? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about If price elasticity of demand for wheat is equal to unity and a household demands 40kg of wheat when the price is Rs 1 per kg . At what price will the household demand 36kg of wheat ? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If price elasticity of demand for wheat is equal to unity and a household demands 40kg of wheat when the price is Rs 1 per kg . At what price will the household demand 36kg of wheat ?.
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