Please and no. 45

Please and no. 45 4.38 Introductory Microeconomics 44 The price elasticity of demand of a commodity is —0.5. At a price of e 20 per unit, total expenditure m it is 2,000. Its price is reduced by 10 per cent. Calculate its demand at the reduced rate. '105 unit 45 A consumer buys 20 units of a good at a price of e 5 per unit. He incurs an expenditure 120, when he buys 24 units. Calculate price elasticity of demand using the percentage method. Comment upon the likely shape of demand curve based on this information. As demand is per/ectlv e {Price elasticity of demand (Ed) = Infinit will be horizontal straight line parallel to X-ax- 46. The price of a commodity is 20 per unit and total expenditure on it is 1 ,OOO. When its price tails to 18 per unit, total expenditure increases by 8 per cent. Calculate its price elasticity of demand ntage method. The price elasticity of demand of X is (-) 1.25. Its price falls from 10 to 8 per unit. Calculate percentaq hange in its demand. (Percentage change (fall) in iB dam price elasticity of demand for a good is -0.4. If its price increases by 5 percent, by what demand tall? Calculate. mand for good rises by 20 percent as a result of fall in its price. Its price elap+ir•C

Dear student,
45. Given,
initial price= 5
final price= 5
initial quantity demanded= 20
final quantity demanded= 24
So,
% change in price= final price- initial price/ initial price*100= (5-5)/5*100= 0
% change in quantity demanded=final quantity demanded-initial quantity demanded/initial quantity demanded*100= (24-20)/20*100=20
Price Elasticity of Demand= % change in quantity demanded/% change in price= 20/0= infinity
As the demand is perfectly elastic (means a change in price would eliminate all demand for the product), the demand curve will be horizontal straight parallel to the X-axis.

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