Answer to Question #129659 in Microeconomics for abdul hadi

Question

An individual spends all his income on two goods X and Y. If with the rise in price of good X, the quantity purchased of good Y remains unchanged, what is the price elasticity of demand for X?

Answer 1

The consumer will have to consume less quantity of good X since its price has increased .This will decrease the quantity of good X demanded.However,price and quantity demanded of good Y will not be affected.