Price of commodity - $X$ falls from $R s . 5$ per kg to $R s . 4$ per kg and the demand of consumer $A$ for its rises from $4 k g$ to $6 k g$ . Express you opinion regarding the nature of elasticity of demand of commodity - $X$ .

Open in App

Solution

$E_{d} = (-) \frac{P}{Q} \times \frac{△ Q}{△ P}$
Here, $P = R s . 5; P_{1} = R s . 4 ∴ △ P = P_{1} - P = R s . 4 - R s . 5 = (-) R s . 1$
$Q = 4 k g; Q_{1} = 6 k g ∴ △ Q = Q_{1} - Q = (6 - 4) k g = 2 k g$
Price elasticity of demand $(E_{d}) = (-) \frac{5}{4} \times \frac{2}{- 1} = \frac{10}{4}$
$= 2.5$ (greater than unity)
Elasticity of demand is greater than unity.

Suggest Corrections

Similar questions

Price of a commodity falls from Rs 20 to Rs 15 per unit. Its demand rises from 600 units to 750 units. Calculate its price elasticity of demand.

Q. The demand by a consumer for a commodity declines by

10

per cent when its price increases from

R s . 5

R s . 6

per unit. What is the price elasticity of demand of th commodity?

Q. A consumer buys 50 units of a commodity at Rs 4 per unit. When its price falls by 25%, its demand rises to 100 units. Find out price elasticity of demand.

a. Arrange the following coefficients of price elasticity of demand in ascending order:
-0.87, -0.53, -3.1, -0.80

b. Comment upon the degree of elasticity of demand for commodity X, if the price of the commodity falls from Rs 28 per unit to Rs 23 per unit and its quantity demanded rises from 50 units to 100 units.

Q. A consumer purchased 10 units of a commodity when its price was Rs 5 per unit. He purchases 12 units of the commodity when price falls to Rs 4 per unit. Calculate the price elasticity of demand for the commodity.

Join BYJU'S Learning Program

Price of commodity - X falls from Rs.5 per kg to Rs.4 per kg and the demand of consumer A for its rises from 4 kg to 6 kg. Express you opinion regarding the nature of elasticity of demand of commodity - X.

Ed=(−)PQ×△Q△PHere, P=Rs.5;P1=Rs.4∴△P=P1−P=Rs.4−Rs.5=(−)Rs.1Q=4 kg;Q1=6 kg∴△Q=Q1−Q=(6−4)kg=2 kgPrice elasticity of demand (Ed)=(−)54×2−1=104=2.5 (greater than unity)Elasticity of demand is greater than unity.

Price of commodity - $X$ falls from $R s . 5$ per kg to $R s . 4$ per kg and the demand of consumer $A$ for its rises from $4 k g$ to $6 k g$ . Express you opinion regarding the nature of elasticity of demand of commodity - $X$ .