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price elasticity of demand of  good is  (-1).the consumer buys 50 units of that good when price is Rs. 2 per unit. how many units will the consumer buy if the price rises to Rs.4 per unit? answer this with the help of total expenditure method of determining price elasticity of demand?

Asked by mithileshs66...(student) , on 19/6/11

Answers

hi mithilesh.. wel here is the answer to your question..

lez make a table with the help of the given information..where price is (cost of one unit multiplied by total commodity)..quantity is measured in terms of units..and let the quantity purchased after the price rises be denoted as"x" ..and lastly total expenditure is ( P * Q ) ..

[PRICE] [QUANTITY] [TOTAL EXPENDITURE]

100 50 5000

200 x 200x

now.. ep = TE beforethe price rises / TE after the price rises ..

-> -1 = 5000 / 200x

-> - 200x = 5000

-> - x = 25

-> squaring both sides ...we get ... x = 25 ..!!!!

hope u got ur answer..!!!! cheers!

keep smiling!!! :)))

Posted by $@nch!t@ <3 <3(student)on 23/6/11

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