Supply of a product is perfectly price-inelastic. Its demand 'decreases'. This leads to fall in real national income. Other things remaining unchange. True or False ? Explain
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Real national income measures GDP in real terms or only in terms of goods and services and not the prices. When the supply is perfectly inelastic, with a fall in demand only the price level will not the quantity demanded or supplied in the economy. Hence the given statement is false.
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Price elasticity of supply is 2.5. At a price of Rs.5/unit its quantity supplied is 300 units. Calculate the quantity supplied at a price of Rs.4/unit
`{:(" P 5"),(" P"_(1)" 4,"),(ulbar(Delta"P -1")):}" "{:("Q 300"),("Q"_(1)" "?),(ulbar(DeltaQ" ?")):}` `P.e_(S)=(P)/(Q)xx(DeltaQ)/(DeltaP)" or "2.5=(5)/(300)xx(DeltaQ)/(-1)` `DeltaQ=-150` `DeltaQ=Q_(1)-Q" or "-150=Q_(1)-300` `Q_(1)=150`
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Supply of commodity is 1200 units at a price of Rs.12/unit. If ths supply of commodity increases to 1600 units, what will be the new price of commodit
`{:(" P 12"),(" P"_(1)" ?,"),(ulbar(Delta"P -1")):}" "{:("Q 1200"),("Q"_(1)" 1600"),(ulbar(DeltaQ" ? ")):}` `P.e_(S)=(P)/(Q)xx(DeltaQ)/(DeltaP)" or "2=(12)/(1200)xx(400)/(DeltaP)` `DeltaP=2` `DeltaP=P_(1)-P" or "2=P_(1)=-12` `P_(1)=14`
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The price elasticity of supply of commodities X and Y is equal. The price of X falls from Rs.10 to Rs.8 per unit and supply falls by 16 percent. The p
Let us calculate `P.e_(S)` for commodity X ltbr. `P=10," "P_(1)=8," "DeltaP=-2` `%DeltaP=(-2)/(10)xx100=-20%` `%DeltaS=-16%` given `"Hence "P.e_(S)=(%"Change in Quantity supplied"_(X))/(%"Change in price"_(X))=((-)16%)/((-)20%)=0.8` `P.e_(S)" of X"=P.e_(S)" of Y (given)"` Hence `P.e_(S)` of...
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At the market price of Rs.10, a firm supplied 4 untis of output. The market price increases to Rs.30. The price elasticity of supply is 1.25. What qua
`{:(" P 10"),(" P"_(1)" 30"),(ulbar(DeltaP" 20")):}" "{:("Q 4"),("Q"_(1)" ?"),(ulbar(DeltaQ" ?")):}` `P.e_(S)=(P)/(Q)xx(DeltaQ)/(DeltaQ)" or "1.25=(10)/(4)xx(DeltaQ)/(20)` `1.25xx8=DeltaQ` `DeltaQ=10.00=10" units"` `DeltaQ=Q_(1)-Q" or "10=Q_(1)-4` `10+4=Q_(1)` `Q_(1)=14` units
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A consumer buys 80 units of a good at a price of Rs. 4 per unit . When the price falls , he buys 100 If price elasticity of demand is (-) 1, find out
`E_(p)=(P)/(Q)xx(DeltaQ)/(DeltaP)` `(-)1=(40)/(80)xx(20)/(DeltaP)` `(-)1=(1)/(DeltaP)` `DeltaP=-1` New price `=P+DeltaP=4+(-1)=Rs.3`.
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A 5 percent fall in the price of X leads to a 10 percent rise in demand for X. A2 per cent reise in the price of Y leads to a 6 percent fall in demand
`E_(P) " of "X=(10)/(-5)=(-)2` `E_(P) " of "Y=(-6)/(2)=(-)3`
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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 c
`E_(P)=(P)/(Q)xx(DeltaQ)/(DeltaP)` `(-)1=(P)/(16)xx(2)/(-1)` `2P=16orP=8(Rs.)`.
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When price of a commodity X falls by 10 percent , its demand rises from 150 units to 180 units. Calculate its price elasticity of demand . How much sh
`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%`.
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At price of Rs. 8 per unit, the quantity supplied of a commodity is 200 units. Its price elasticity of supply is 1.5 . If its price rises to Rs. 10 pe
`E_(s)=(P)/(Q_(s))xx(DeltaQ_(s))/(DeltaP)` `1.5=(8)/(200)xx(DeltaQ_(s))/(2)` `8DeltaQ_(s)=600` `DeltaQ_(s)=75` New `Q=Q_(s)+DeltaQ_(s)=200+75=275` units
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The price elasticity of supply of a commodity Y is half the price elasticity of supply of commodity X. 16 percent rise in price of X results in 40 per
`E_(s) ` of X `=(40)/(16)=2.5` `therefore " "E_(s)` of Y =`2.5 div 2=1.25` `E_(s)` of Y `=(%"change in supply")/(% "change in price")` `1.25=(%"change in supply")/(8)` % change in supply `=8xx1.25=10`...
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