ECONOMICS
ELASTICITY OF DEMAND
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]


4


3


2


1

Detailed explanation1: when the price is is rs 5 per unit a consumer buys 40 unit of a commodity and his price elasticity of demand is1.5 how much will he buy if the prices reduced to rs 4 per unit. Hence, the new quantity demanded is 52 units.
Detailed explanation2: A decline in the price of good X by Rs. 5 causes an increase in its demand by 20 units to 50 units. The new price is X 15.
Detailed explanation3: When price of the commodity reduces from 5 per unit to 4 per unit, expenditure on thecommodity reduces from 60 to 48. Find price elasticity of demand by percentage method. (Ans. E= 0 (zero)
Detailed explanation4: If price elasticity is exactly 1 (price change leads to an equal percentage change in demand), it is known as unitary elasticity.