Question : The quantity demanded of a good decreases from 400 units to 300 units when the price increases from INR 20 to INR 30 per unit. Calculate the price elasticity of demand.
Option 1: -0.5
Option 2: -1.0
Option 3: -1.5
Option 4: -2.0
Correct Answer: -1.0
Solution : The correct answer is (b) -1.0.
Percentage change in quantity demanded = (300 - 400) / 400 * 100% = -25%
Percentage change in price = (30 - 20) / 20 * 100% = 50%
Price elasticity of demand = -25 / 50 = -1.0
A price elasticity of demand of -1.0 means that a 1% increase in price leads to a 1% decrease in quantity demanded. In this case, a 50% increase in price leads to a 25% decrease in quantity demanded. This suggests that demand for this good is relatively elastic, meaning that consumers are sensitive to changes in price.
Question : The quantity demanded of a good decreases from 200 units to 160 units when the price increases from INR 20 to INR 25 per unit. Calculate the price elasticity of demand.
Option 1: 0.5
Option 2: 1.0
Option 3: 1.5
Option 4: 2.0
Question : If the price of a product increases from INR 50 to INR 60 per unit, and the quantity demanded decreases from 100 units to 80 units, calculate the price elasticity of demand.
Question : The quantity demanded of a good increases from 500 units to 600 units when the price decreases from INR 10 to INR 8 per unit. Calculate the price elasticity of demand.
Option 1: 0.6
Option 3: 1.2
Question : A product has an initial quantity demanded of 100 units at a price of INR 10 per unit. Due to a price change, the new quantity demanded is 120 units. Calculate the price elasticity of demand.
Option 2: 1.5
Option 3: 2.0
Option 4: 2.5
Question : When the price of a good increases by 10%, and the quantity demanded decreases by 5%, what is the price elasticity of demand?
Option 1: 0.2
Option 2: 0.5
Option 3: 1.0
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