Let Qx=1400/Px,now calculate:- 1 total expd on good x when Px from Rs 6 to Rs 1 2 derive the - Economics - Theory of Consumer Behaviour

Question

Let Qx=1400/Px,now calculate:-
1 total expd on good x when Px from Rs 6 to Rs 1
2 derive the value of Ed
3 what shape will the demand curve take ?

Ritika Chauhan · Accepted Answer

(i) $T o t a l \exp e n d i t u r e = P_{x} \times Q_{x}$

Given, $Q_{x} = \frac{1400}{P_{x}}$

$Q_{x} \times P_{x} = 1400$

This means that Total expenditure will remain constant. In other words, change in price only affects the quantity and not the expenditure.

(ii)

Therefore, elasticity of demand is equal to -6.

) 233 33 1400 1166 67 Price(

) 6 1 -5

Therefore, elasticity of demand is equal to -6

Let Qx=1400/Px,now calculate:- 1.total expd on good x when Px from Rs.6 to Rs 1 2.derive the value of Ed 3.what shape will the demand curve take.?