The quantity demanded of a commodity falls by 5 units when price rises by Rs 1 per unit. Its elasticity of demand is (-) 1.5 . Calculate the price before change if this price quantity demanded was 60 units.

Chidaksha,

Q = -5P = 1Ed = (-)1.5Q0 = 60P0 = ?Ed = QP × P0Q0-1.5 = -51 × P060P0 = Rs 18

Therefore, the price before change was Rs 18.

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