Answer to Question #113270 in Macroeconomics for tayyab nawaz

Question

a consumer buys 10 unita of a good at the price of 11 per unit then the price falls ro 9 per unit he spends rupees 90 on the goods calculate the price elasicticty of demand

Answer 1

When the price fell to 9, the demanded quantity was 10 units ( 90/9).

Price elasicticty of demand ca be found with the formula:

$Price Elasicticty Of Demand=Change In Quantity/Change In Price$

$PED=0/(-0.18)=0$

The demand is perfectly inelastic. Demand does not change at all when the price changes.