No products in the cart.

When the price of good raises …

CBSE, JEE, NEET, CUET

CBSE, JEE, NEET, CUET

Question Bank, Mock Tests, Exam Papers

NCERT Solutions, Sample Papers, Notes, Videos

When the price of good raises from rupee 10 per unit to rupee 12 per unit its quantity demand falls by 20%. Calculate its Ed. How much would be the % change in its quantity demanded ,if price rises from 10 units to 13 price unit.
  • 1 answers

Sia ? 6 years, 3 months ago

Old Price (P) = Rs 10
New Price = Rs 12
Change in Price ({tex}\Delta{/tex}P) = Rs 2( 12 - 10)
Percentage Change in Price
{tex}= \frac { \text { Change in Price } } { \text { Old Price } } \times 100{/tex}
{tex}= \frac { 2 } { 10 } \times 100 = 20 \%{/tex}
Percentage change in quantity demanded = -20% ( since the quantity demand has fallen by 20%)
(given)
We know that, Elasticity of Demand
Ed = - {tex}\frac { \text { Percentage Change in Quantity Demanded } } { \text { Percentage Change in Price}}{/tex}
= (-){tex}\frac { 20 } { 20 } ={/tex}(-)1
Now according to the given condition,
Old Price (P) = Rs 10
New Price = Rs 13 .
{tex}\therefore{/tex}Change in price = Rs 3(13 - 10)
Percentage Change in Price
{tex}= \frac { \text { Change in Price } } { \text { Old Price } } \times 100{/tex}={tex}\frac { 3 } { 10 } \times 100{/tex}= 30%
Elasticity of Demand (Ed)
{tex}- 1 = \frac { \text { Percentage Change in Quantity Demanded } } { 30 }{/tex}
So, Percentage change in quantity demanded =30%

therefore, the quantity demanded will fall by 30% when price rises from Rs 10 to Rs13.

https://examin8.com Test

Related Questions

Features of ur
  • 0 answers
Featured of ur
  • 1 answers
Different between primary and secondary data
  • 1 answers
Notes
  • 0 answers

myCBSEguide App

myCBSEguide

Trusted by 1 Crore+ Students

Test Generator

Test Generator

Create papers online. It's FREE.

CUET Mock Tests

CUET Mock Tests

75,000+ questions to practice only on myCBSEguide app

Download myCBSEguide App