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Theory of consumer behaviour — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsTheory of consumer behaviour3 Marks
Question
Quantity demanded of a commodity rises by $6$ units, when its price falls by $1$ per unit. Its Price Elasticity of Demand is $(-) 1$.
If the price before the change was $₹ 20$ per unit, calculate quantity demanded at this price.
✓

Answer

Given, $P = ₹ 20,$ $\Delta \text{P}=(-)\ ₹\ 1,$ $Q = ?,$
$\Delta \text{Q}=6\text{ units},$
Price Elasticity of Demand $(E_d)$ $=\frac{\text{P}}{\text{Q}}\times\frac{\Delta \text{Q}}{\Delta \text{P}}$
$(-)1=\frac{20}{\text{Q}}\times\frac{6}{(-)1}$
$(-)1=\frac{120}{(-)\text{Q}}$
$\text{Q}=120$
$\therefore$ Quantity demanded before change in price$ = 120$ units.

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