Price elasticity of demand of a good is (-)1 . When its price falls by one rupee , its demand rises from 16 to 18 units . Calculate the price before change.
`E_(P)=(% "change in " Q_(d))/(% " change in P")`
`(-)1 =(% " change in " Q_(d))/(-10%)`
`:.% "change in " Q_(d)=+10%`.
Demand after price falls `=Q+10% " of " Q=60+...
`E_(P)=(% "change in " Q_(d))/(% " change in P")`
`(-)2=(50%)/(% " change in P")`
`%` Change in P `=(50)/(-2)=-25%`
New `P=P+%` change in P
`=8+(-25% " change of " 8)...
`E_(P)=(% " change in " Q_(d))/(% " change in P")=((30)/(150)xx100)/(-10)=(-2)`
`-2=((60)/(150)xx100)/(%" change in price")`
`%` change in Price `=(60)/(150)xx100xx(1)/(-2)=-20%`.