# Please answer no. 77 and 78 Dear student,
77. Given,
% change in price = (-)10
initial quantity demanded= 100 units
final quantity demanded= 120 units
so, change in quantity demanded= final quantity demanded-initial quantity demanded= 120-100=20 units
% change in quantity demanded= change in quantity demanded/initial quantity demanded*100= 20/100*100=20

Price Elasticity of Demand (PED) = % change in quantity demanded / % change in price
SO, PED= 20/(-)10= -2
If, % change in price = 10
PED= -2 (
calculated above)
then,% change in quantity demanded= PED * % change in price= -2*10= -20 (negative sign shows fall in quantity)
So, 10% rise in price will lead to 20% fall in quantity demanded.
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78. Given,
% change in quantity demanded = 60
% change in price = (-)50

Price Elasticity of Demand (PED) = % change in quantity demanded / % change in price
SO, PED= 60/(-)50= -1.2
Since PED is less than 1, percentage of change in demand is more than the percentage of change in price, it means the demand is elastic. (The negative sign only shows the inverse relation between price and demand).

Regards
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