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A consumer demands 5 units of a commodity at the price of ?4 per unit. He demands 10 units when the price falls to Rs3 per unit. Price elasticity of demand is equal to :
3
4
2
1.5
To find the price elasticity of demand, you can use the formula:
$$ \text{Price Elasticity of Demand} (E_d) = \frac{\% \text{ Change in Quantity Demanded}}{\% \text{ Change in Price}} $$
- Calculate the percentage change in quantity demanded:
$$ \%- \text{change in quantity demanded} = \frac{10 - 5}{5} \times 100 = 100\% $$
- Calculate the percentage change in price:
$$ \%- \text{change in price} = \frac{3 - 4}{4} \times 100 = -25\% $$
- Plug values into the formula:
$$ E_d = \frac{100\%}{-25\%} = -4 $$
- Since elasticity is expressed as a positive value:
$$ E_d = 4 $$
- So, the correct option is Option:2, 4
By: santosh ProfileResourcesReport error
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