Question : If the price of a product increases from INR 50 to INR 60 per unit, and the quantity demanded decreases from 100 units to 80 units, calculate the price elasticity of demand.
Option 1: 0.5
Option 2: 1.0
Option 3: 1.5
Option 4: 2.0
Correct Answer: 0.5
Solution : The correct answer is (a) 0.5
To calculate the price elasticity of demand, we'll use the formula:
Elasticity = (Percentage change in quantity demanded) / (Percentage change in price)
Given that the quantity demanded decreases from 400 units to 300 units, we can calculate the percentage change in quantity demanded:
Percentage change in quantity demanded = [(300 - 400) / 400] * 100% = -25%
The price increases from ₹20 to ₹30 per unit, so we can calculate the percentage change in price:
Percentage change in price = [(30 - 20) / 20] * 100% = 50%
Now, let's substitute the values into the elasticity formula:
Elasticity = (-25% / 50%) = -0.5
The calculated price elasticity of demand is -0.5
Question : The quantity demanded of a good decreases from 200 units to 160 units when the price increases from INR 20 to INR 25 per unit. Calculate the price elasticity of demand.
Question : The quantity demanded of a good decreases from 400 units to 300 units when the price increases from INR 20 to INR 30 per unit. Calculate the price elasticity of demand.
Question : A product has an initial quantity demanded of 100 units at a price of INR 10 per unit. Due to a price change, the new quantity demanded is 120 units. Calculate the price elasticity of demand.
Question : The quantity demanded of a good increases from 500 units to 600 units when the price decreases from INR 10 to INR 8 per unit. Calculate the price elasticity of demand.
Question : If the price of a product increases from INR 50 to INR 60 per unit, and the quantity demanded decreases from 80 units to 70 units, calculate the percentage change in quantity demanded.
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