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when a price of goods rises rs 10 to rs 12 per unit. its quantity demanded falls by 20%. calculate it price elasticity of demand . how much would be the percentage change in its quantity demanded if price rise from rs 10 to rs 13 solution
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when a price of goods rises rs 10 to rs 12 per unit. its quantity dema...
well here u can see there are two questions to find:1.price elasticity of demand 2.percentage change in quantity demandso lets solve this step by stepto understand this better assume first que as x and second que as ynow lets start..........1. price elasticity of demand of xacc to que:original price=10new price=12%change in quantity=-20%elasticity of demand=?first find change in priceapply the formulachange in price=new price -original price =12-10 =Rs 2now percentage change in price=change in price -------------------- *100 original price =2 ----- *100 10 =20%now calculate price elasticity of demand apply the formulaelasticity of demand=percentage change in quantity ----------------------------- percentage change in price =-20 ------ 20so price elasticity of demand is (-)12.price elasticity of yacc to queoriginal price=10new price=13%change in quantity=?elasticity of demand=(-)1(we have find this in above question)now same u have to do in here also apply the formulachange in price=13-10 =Rs 3percentage change in price=change in price -------------------- *100 original price =3 ---- *100 10 =30%now the last step is to find percentage change in quantity demandelasticity of demand=% change in Q __________ %change in P-1 = %change in Q -------------------- 30So percentage change in quantity is -30hope u understand this any doubt regarding this question ucan ask me.
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when a price of goods rises rs 10 to rs 12 per unit. its quantity dema...
Understanding Price Elasticity of Demand
Price elasticity of demand (PED) measures how much the quantity demanded of a good responds to a change in its price. It is calculated using the formula:
PED = (% Change in Quantity Demanded) / (% Change in Price)
Step 1: Calculate the Initial PED
- Initial Price = Rs 10
- New Price = Rs 12
- Initial Quantity Demanded = 100% (assumed)
- New Quantity Demanded = 100% - 20% = 80%
- % Change in Price = ((12 - 10) / 10) * 100 = 20%
- % Change in Quantity Demanded = ((80 - 100) / 100) * 100 = -20%
- Now, calculate PED:
PED = (-20%) / (20%) = -1
This indicates that the demand is elastic since the absolute value is greater than 1.
Step 2: Calculate the Effect of a Price Increase from Rs 10 to Rs 13
- New Price = Rs 13
- % Change in Price = ((13 - 10) / 10) * 100 = 30%
Using the previously calculated PED of -1:
- % Change in Quantity Demanded = PED * % Change in Price
- % Change in Quantity Demanded = -1 * 30% = -30%
Conclusion
- When the price rises from Rs 10 to Rs 12, the price elasticity of demand is -1, indicating elastic demand.
- If the price further increases to Rs 13, the quantity demanded is expected to decrease by 30%.
This analysis provides insight into consumer behavior in response to price changes.
Price elasticity of demand (PED) measures how much the quantity demanded of a good responds to a change in its price. It is calculated using the formula:
PED = (% Change in Quantity Demanded) / (% Change in Price)
Step 1: Calculate the Initial PED
- Initial Price = Rs 10
- New Price = Rs 12
- Initial Quantity Demanded = 100% (assumed)
- New Quantity Demanded = 100% - 20% = 80%
- % Change in Price = ((12 - 10) / 10) * 100 = 20%
- % Change in Quantity Demanded = ((80 - 100) / 100) * 100 = -20%
- Now, calculate PED:
PED = (-20%) / (20%) = -1
This indicates that the demand is elastic since the absolute value is greater than 1.
Step 2: Calculate the Effect of a Price Increase from Rs 10 to Rs 13
- New Price = Rs 13
- % Change in Price = ((13 - 10) / 10) * 100 = 30%
Using the previously calculated PED of -1:
- % Change in Quantity Demanded = PED * % Change in Price
- % Change in Quantity Demanded = -1 * 30% = -30%
Conclusion
- When the price rises from Rs 10 to Rs 12, the price elasticity of demand is -1, indicating elastic demand.
- If the price further increases to Rs 13, the quantity demanded is expected to decrease by 30%.
This analysis provides insight into consumer behavior in response to price changes.
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when a price of goods rises rs 10 to rs 12 per unit. its quantity demanded falls by 20%. calculate it price elasticity of demand . how much would be the percentage change in its quantity demanded if price rise from rs 10 to rs 13 solution
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when a price of goods rises rs 10 to rs 12 per unit. its quantity demanded falls by 20%. calculate it price elasticity of demand . how much would be the percentage change in its quantity demanded if price rise from rs 10 to rs 13 solution for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about when a price of goods rises rs 10 to rs 12 per unit. its quantity demanded falls by 20%. calculate it price elasticity of demand . how much would be the percentage change in its quantity demanded if price rise from rs 10 to rs 13 solution covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for when a price of goods rises rs 10 to rs 12 per unit. its quantity demanded falls by 20%. calculate it price elasticity of demand . how much would be the percentage change in its quantity demanded if price rise from rs 10 to rs 13 solution.
when a price of goods rises rs 10 to rs 12 per unit. its quantity demanded falls by 20%. calculate it price elasticity of demand . how much would be the percentage change in its quantity demanded if price rise from rs 10 to rs 13 solution for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about when a price of goods rises rs 10 to rs 12 per unit. its quantity demanded falls by 20%. calculate it price elasticity of demand . how much would be the percentage change in its quantity demanded if price rise from rs 10 to rs 13 solution covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for when a price of goods rises rs 10 to rs 12 per unit. its quantity demanded falls by 20%. calculate it price elasticity of demand . how much would be the percentage change in its quantity demanded if price rise from rs 10 to rs 13 solution.
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