Question 9 .

Question 9 . J. cars d. LED Television 8. The Ed = 0.5. The % change it] QD '"he co-efficient of Ep of a comrnrod't/ The QD units. If the pote falls to

Dear Student,

Price Elasticity of Demand can be mathematically written as- 

Ep= [%Change in Quantity Demanded] / [% Change in Price]   - (Equation 1 )

By given question, 

Where Ep=0.2, the other two variables can be put on as:

% Change in Price= [New Price - Old Price] / Old Price = (5-10)/10 = -0.5 
% Change in Quantity Demanded = [ New Quantity- Old Quantity]/Old Quantity = (x-40)/40

Thus, putting  these values in Equation 1:

0.2= [(x-40)/40 ] / -0.5
(x-40)/40 = -0.1
x-40 = -4
x=36 units

Thus, the new quantity demanded is 36 units

Regards.