A consumer buys 18 units of a good at a price of Rs.9 per unit. The price elasticity of demand for the good is (−)1. How many units the consumer will buy at a price of Rs.10 per unit? Calculate.
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Given, P=Rs.9;P1=Rs.10;△P=P1−P=Rs.10−Rs.9=Rs.1 Q=18units;Q1=? Ed=(−)1 Price elasticity of demand (Ed)=PQ×△Q△P −1=918×△Q1 △Q=−2 Now, △Q=Q1−Q −2=Q1−18 Q1=18−2=16 Consumer will buy 16 units at a price of Rs.10 per unit.
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