Mr. ram spend rupees 200 on a commodity and brought 20 units of it .
then it price change he spend rupees 300 and bought 15 units find out the elasticity of demand.

-0.5

  • -2
Mr Ram spends rupees 200 on a commodity and draw 20 units of it when the price change his 2300 and 15 units find out elasticity of demand
  • 3
Te = Rs.200
Te1 = rs.300
Q = 20
Q1 = 15
P = Rs.10
P1 = Rs.20
​​​​​​​change in price = P1-P = 20-10 = 10
change in quantity = Q1-Q = 15-20 = -5
elasticity of demand = ( change in quantity / change in price ) * (P / Q )
​​​​​​​                                 = ( -5 / 10 ) * ( 10 / 20 )
                                 = -1 / 4
                                 = ( - ) 0.25

where,
          Te = total expenditure
           P = price
​​​​​​​           Q = quantity demanded
  • 1
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