Question
When the price of a commodity falls by ₹ 2 per unit, its quantity demanded increases by 10 units. Its price elasticity of demand is (-)1. Calculate its quantity demanded at the price before change which was ₹ 10 per unit.
| PED = [-]1 Given | |
| Price before change [Initial Price] P = 10 | Initial Quantity (Q) = ? |
| New Price (P1) = 8 | New Quantity (Q1) = ? |
| $\Delta \text{P} = -2$ [Given] | $\Delta \text{Q} = 1$ |
$\text{PED}=\frac{\Delta\text{Q}}{\Delta\text{P}}\times\frac{\text{P}}{\text{Q}}$
$(-)1=\frac{10}{(-)2}\times\frac{10}{\text{Q}}$
$\text{Q}=\frac{100}{2}=50$
So, the quantity demanded at price before change [P], i.e., 10, is equal to 50.
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