Answer:
Quantity (Q) Price (P) Total Expenditure (TE) 12 Rs. 7 84 12 Rs. 6 72 We know Price \[\times \] Quantity = Total Expenditure or, 6 \[\times \] Quantity = 72 or, Quantity =12 Now, \[{{e}_{d}}=\frac{\text{Percentage}\,\,\text{change}\,\,\text{in}\,\,\text{quantity}}{\text{Percentage}\,\,\text{Change}\,\,\text{in}\,\,\text{price}\,\,}\] Percentage change in quantity \[=\frac{\Delta Q}{P}\,\,\times \,\,100=\frac{12-12}{12}\times 100=0\] Percentage change in price \[=\frac{\Delta P}{P}\,\,\times \,\,100=\frac{6-7}{7}\,\,\times \,\,100=14.28\] Substituting the values in the formula of price elasticity of demand, so, \[{{e}_{d}}=\frac{0}{14.28}=0\] Thus, the demand is perfectly inelastic. As the demand is perfectly inelastic, so the demand curve is a vertical straight line parallel to the price - axis.
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