12th Class Economics Solved Paper - Economics 2012 Outside Delhi Set-II

  • question_answer A consumer buys 14 units of a good at a price of Rs. 8 per unit. At price Rs. 7 per unit he spends Rs. 98 on the good. Calculate price elasticity of demand by the percentage method. Comment upon the shape of demand curve based on this information.


    Price (Rs.) Q (Units) Total Expenditure (Rs.)
    8 14 112
    7 14 98
    P = 8, \[{{P}_{1}}\]= 7, = 14, \[{{Q}_{1}}\]= 14
    \[\Delta P~=78=1,\,\,\,\,\Delta Q=1414=0\]
    \[{{E}_{d}}=\frac{\Delta Q}{\Delta P}\,\,\times \,\,\frac{P}{Q}=\frac{0}{-1}\,\,\times \,\,\frac{8}{14}=0\]
    Therefore, the shape of demand curve will be perfectly inelastic.

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