CBSE Class 12 Economics Elasticity of Demand Worksheet

ELASTICITY OF DEMAND

Question. When the price of a commodity increases from Rs. 8 to Rs. 9 then the demand decreases by 10%. The price Elasticity of demand is
(a) 0.8
(b) 0.9
(c) 1
(d) 1.1
Answer: A

Question. Suppose a Department Store has a sale on its silverware. If the Price of a platesetting is reduced from ! 300 to ! 200 and the quantity demaAed increases from 3,000
(a) 0.8
(b) 2.0
(c) 1 . 25
(d) 1.5
Answer: B

Question. If the demand for the good is unit elastic, the Demand Curve will be —
(a) Horizontal Line
(b) Vertical Line
(c) Rectangular Hyperbola
(d) Nothing can be said
Answer: C

Question. Vertical Demand Curve will show that the price elasticity of demand is —
(a) Perfectly inelastic
(b) Perfectly elastic
(c) Inelastic
(d) Unitary
Answer: B

Question. Rectangular Hyperbola is also called —
(a) Equilateral Hyperbola
(b) Vertical Line
(c) Square
(d) Horizontal Line
Answer: A

Question. Elasticity of Demand is attributed to —
(a) Changes in Prices
(b) Changes in Incomes
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Answer: C

Question. If the demand for the good is perfectly inelastic, which of the following is correct?
(a) Quantity does not change at all
(b) Quantity decreases and price falls
(c) Quantity increases and price increases
(d) Quantity increases and price falls
Answer: A

Question. A book seller estimates that if the price of a book is increased from ! 60 to ! 67, the quantity of books demanded will decrease from 2,035 to 1,946. The Book's Price Elasticity of Demand is approximately -
(a) 0.4
(b) 0.8
(c) 1.0
(d) 2.5
Answer: A

Question. Goods which have fewer substitutes are —
(a) Less Elastic
(b) Unit Elastic
(c) More Elastic
(d) Zero Elastic
Answer: A

Question. Identify the coefficient of price—elasticity of demand when the percentage increase in the quantity demanded of a product is smaller than the percentage fall in its price.
(a) Equal to one
(b) Greater than one
(c) Smaller than one
(d) Zero
Answer: C

Question. Which of the following statements regarding Elasticity of Demand is true?
(a) Elasticity of demand decreases as one goes down a Straight Line Demand Curve
(b) Elasticity of Demand increases as one goes down a Straight Line Demand Curve 
(c) Elasticity of Demand is constant throughout the Straight Line Demand Curve
(d) None of the above
Answer: A

Question. Suppose the price of movies seen at a Theatre rises from ! 120 to ! 200 per person. The Theatre Manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 persons. What is the Price Elasticity of Demand for Movies?
(a) 0.5
(b) 0.8
(c) 1.0
(d) 1.2
Answer: A

Question. Identify the coefficient of price—elasticity of demand when the percentage increase in the quantity demanded of a product is more than the percentage fall in its price.
(a) Equal to one
(b) Greater than one
(d) Zero
Answer: B

Question. If the demand for the good is more elastic, and E is the measure of Elasticity, which of the following is true?
(a) E = 0
(b) 0 < E < 1
(c) E = 1
(d) E > 1
Answer: D

Question. If the demand for the good is more elastic, the Demand Curve will be —
(a) Horizontal Line
(b) Vertical Line
(c) Downward Sloping to the right, flatter
(d) Downward Sloping to the right, steeper
Answer: C

Question. If the demand for a good is unit elastic, the value of the elasticity of demand would be —
(a) 0
(b) 1
(c) Infinity
(d) Less than 0 
Answer: B

Question. What would be the value of Elasticity of
(a) 0
(b) 1
(c) Infinity
(d) Less than 0
Answer: C

Question. Price Elasticity of Demand is defined as —
(a) Change in quantity demanded ÷ Change in price
(b) Proportionate change in quantity demanded ÷ Change in Price
(c) Change in quantity demanded ÷ Proportionate change in Price
(d) Proportionate change in quantity demanded Proportionate change in price
Answer: D

Question. Horizontal Demand Curve will show that the price elasticity of demand is —
(a) Perfectly inelastic
(b) Perfectly elastic
(c) Inelastic
(d) Unitary
Answer: A

Question. When quantity demanded changes by larger percentage than Price, Elasticity is termed as —
(a) Inelastic
(b) Perfectly elastic
(c) Elastic
(d) Perfectly inelastic
Answer: C

Question. What is the mean by price elasticity of demand greater than 1-
(a) % change in quantity demanded is less than % change in price.
(b) % change in quantity demanded is more than %change in price,
(c) No change in quantity and price
(d) None of these
Answer: B

Question. If the demand for a commodity is ... , entire burden of indirect tax will fall on the consumer.
(a) Relatively inelastic
(b) Perfectly inelastic
(c) Perfectly elastic
(d) Relatively elastic
Answer: B

Question. If the price of 'X' rises by 10% and the quantity demanded falls by 10%, 'X' has —
(a) Inelastic Demand
(b) Unit Elastic Demand
(c) Zero Elastic Demand
(d) Elastic Demand
Answer: B

Question. If a point on a Demand Curve of any Product lies on Y Axis, then Price Elasticity of Demand of that commodity at that point will be -
(a) Infinite
(b) More than zero
(c) Less than zero
(d) Zero
Answer: A

Question. If the demand for a product reduces by 5% as a result of an increase in the price by 25%. What is the Price Elasticity of Demand?
(a) - 0 . 2
(b) - 0 . 5
(c) - 0 . 25
(d) 0.2
Answer: A

Question. If a product has less elastic demand, and there is a change in its price, which of the following is correct?
(a) Percent Change in Quantity demanded will be greater than Percent Change in Price
(b) Percent Change in Quantity demanded will be lesser than Percent Change in Price
(c) Percent Change in Quantity demanded will be equal to Percent Change in Price
(d) Quantity demanded will not change at all
Answer: B

Question. If the demand for a product reduces by 2% as a result of an increase in the price by 10%, what is the Price Elasticity of Demand for the product?
(a) +0.20
(b) - 0 . 40
(c) - 0 . 20
(d) +0.40
Answer: C

Question. For goods with perfectly elastic demand —
(a) Ap > Aq
(b) Ap = Aq
(c) Ap = 0
(d) Aq = 0
Answer: C

Question. If the demand for the good is unit elastic, the Demand Curve will be —
(a) 45 degree Straight Line, sloping downward to the right
(b) Rectangular Hyperbola
(c) Equilateral Hyperbola
(d) Any of the above
Answer: D

Question. If the Demand for Cricket Balls increases from 50 to 55 because of fall in price from ! 25 to 24, what is the Price Elasticity of Demand for Cricket Balls?
(a) ( 1 . 0 )
(b) ( 2 . 5 )
(c) (2)
(d) (5)
Answer: B

Question. If the demand for the good is unit elastic, the Demand Curve will be —
(a) 45 degree Straight Line, sloping downward to the right
(b) Rectangular Hyperbola
(c) Either (a) or (b)
(d) Neither (a) nor (b)
Answer: C

Question. What is the Price Elasticity of Demand for a product, if an increase in the price of the good by 2% leads to fall in demand by 3%?
(a) +1 .5
(b) - 1 . 5
(c) 1
(d) 0
Answer: B

Question. X Axis, then Price Elasticity of Demand of that commodity at that point will be -
(a) Infinite
(b) More than zero
(c) Less than zero
(d) Zero
Answer: D

Question. If a product has unit elastic demand, and there is a change in its price, which of the following is correct?
(a) Percent Change in Quantity demanded will be greater than Percent Change in Price
(b) Percent Change in Quantity demanded will be lesser than Percent Change in Price
(c) Percent Change in Quantity demanded will be equal to Percent Change in Price
(d) Quantity demanded will not change at all
Answer: C

Question. Price of Mangoes increases by 22% and the quantity of mangoes demanded falls by 25%. This indicates that demand for mangoes is -
(a) Elastic
(b) Inelastic
(c) Unitarily elastic
(d) Perfectly elastic
Answer: A

Question. Goods which can be put to multiple uses are —
(a) Less Elastic
(b) Unit Elastic
(c) More Elastic
(d) Zero Elastic
Answer: C

Question. Identify the factor which generally keeps thePrice—Elasticity of Demand for a product low.
(a) Variety of Uses for that product
(b) Its Low Price 
(c) Close Substitutes for that product
(d) High proportion of the Consumer's Income spent on it
Answer: B

Question. If the demand for the good is perfectly elastic, and E is the measure of Elasticity, which of the following is true?
(a) E = 0
(b) 0 < E < 1
(c) E > 1
(d) E = Infinity
Answer: D

Question. If the demand for the good is perfectly inelastic, and E is the measure of Elasticity, which of the following is true?
(a) E = 0
(b) 0 < E < 1
(c) E = 1
(d) E > 1
Answer: A

Question. Horizontal Demand curve, Parallel to X-axis indicates, that the elasticity of Demand is
(a) Zero
(b) Infinite
(c) > 1
(d) < 1
Answer: B

Question. What is the new quantity demanded when Price Elasticity is 1 and price changes from ! 15 to ! 10 and the original quantity demanded was 10 units?
(a) 15 units
(b) 20 units
(c) 8 units
(d) 12 units
Answer: A

Question. will be the price elasticity if original price is Z5, original quantity is 8 units and changed price is !6 changed quantity is 4 units?
(a) 2.5
(b) 2.0
(c) 1.5
(d) 1.0
Answer: A

Question. The original price of commodity is 2500 and quantity demanded is 20 kgs. If price rises to Z 750 and quantity demanded reduce to 15 kgs, price elasticity of demand is
(a) 0.25
(b) 0.50
(c) 1.00
Answer: B

Question. The price of a tiffin box is Z 100 per unit and the quantity demanded in a market is 1,25,000 units. Company increased the price to Z 125 per unit due to this increase in price quantity demanded decreases to 1,00,000 units. What will be price elasticity of demand
(a) 1.25
(b) 0.80
(c) 1.00
(d) None
Answer: C

Question. If Price of Coffee decreases from ! 5 to ! 4.50, and as a result the Consumer's Demand for Coffee increase from 60 grams to 75 grams, the absolute Price Elasticity of Demand of Coffee is -
(a) 1.5
(b) 3.0
(c) 2.0
(d) 2.5
Answer: D

Question. Point Elasticity of Demand is calculated as -
(a) Upper Segment + Lower Segment
(b) Lower Segment ÷ Upper Segment
(c) Either (a) or (b)
(d) Neither (a) nor (b)
Answer: B

Question. Price Elasticity of Demand would be higher for those products which have —
(a) A larger number of Substitutes
(b) Fewer Substitutes
(c) No Substitutes
(d) Fewer Complementary Goods
Answer: A

Question. If a shop raises the price of a product from ! 60 to 100 and quantity demanded falls from 400 units to 300 units, the Price Elasticity of Demand is -
(a) 0.667
(b) 0.500
(c) 1.000
(d) 0.375
Answer: D

Question. Demand for a good will tend to be more elastic if it exhibits which of the following features?
(a) It represents a small part of the consumer's income
(b) The good has many substitutes available
(c) It is a necessity (as opposed to a luxury)
(d) There is little time for the Consumer to adjust to the price change
Answer: B

Question. Which is correct about price elasticity of demand?
(a) It is several degrees and natures
(b) It is unaffected due to change in price of other goods
(c) It is immeasurable concept
(d) It is due to direction of change in price
Answer: A

Question. In case of Straight Line demand curve meeting two axes, the Price Elasticity of demand at a point where the curve meets xaxis would be
(a) 1
(b) 0 0
(c) 0
(d) >1
Answer: C

 

Question. Goods having Zero Income Elasticity are —
(a) Inferior Goods
(b) Normal Goods
(c) Luxury Goods
(d) None of the above
Answer: D

Question. Which of the following statements regarding Elasticity of Demand is true?
(a) If the demand for the product is inelastic, an increase in price will have a positive effect on the total revenue of the Firm
(b) If the demand for the product is elastic, an increase in price will have a positive effect on the total revenue of the Firm
(c) If the demand for the product is inelastic, an increase in price will have a negative effect on the total revenue of the Firm
(d) If the demand for the product is inelastic, a decrease in price will have a positive effect on the total revenue of the Firm.
Answer: A

Question. Under Total Outlay Method, if Price and Consumer's Total Expenditure on the product move in opposite directions, then, Price Elasticity of Demand is —
(a) Equal to unity
(b) Greater than unity
(c) Less than unity
(d) Zero
Answer: B

Question. Given the following four possibilities, which one results in an increase in Total Consumer Expenditure?
(a) Demand is unitary elastic and price falls
(b) Demand is elastic and price rises
(c) Demand is inelastic and price falls
(d) Demand is inelastic and price rises
Answer: D

Question. What will be the Slope of Demand Curve when it shows the Cross Elasticity between two Complementary Goods?
(a) Negative
(b) Positive
(c) Horizontal
(d) None of these
Answer: A

Question. What is the Price Elasticity of Demand when, price changes from Z 10 to Z 12 and as a result, demand falls from 6 units to 4 units?
(a) 0.833
(b) 1.6
(c) 2.2
(d) 1.833
Answer: C

Question. An increase in price will result in an increase in Total Revenue if —
(a) Percentage Change in quantity demanded is less than the Percentage Change in Price
(b) Percentage Change in quantity demanded is more than Percentage Change in price
(c) Demand is elastic
(d) Consumer is operating along a Linear Demand Curve at a point at which the price is very high and the quantity demanded is very low
Answer: A

Question. If the demand for a product is elastic, an increase in its price will cause the Total Expenditure of the Consumers to —
(a) Remain the same
(b) Increase
(c) Decrease
(d) Any of these
Answer: C

Question. Under Total Outlay Method, if as a result of the decrease in price of a product, the total expenditure on the product decreases, we say that Price Elasticity of Demand is —
(a) Equal to unity
(b) Greater than unity
(c) Less than unity
(d) Zero
Answer: C

Question. Under Total Outlay Method, if Price and Consumer's Total Expenditure on the product move in the same direction, then, Price Elasticity of Demand is —
(a) Equal to unity
(b) Greater than unity
(c) Less than unity
(d) Zero
Answer: C

Question. If the demand for a product is inelastic, an increase in its price will cause the Total Expenditure of the Consumers to —
(a) Remain the same
(b) Increase
(c) Decrease
(d) Any of these
Answer: B

Question. If the demand for a product is inelastic, an decrease in its price will cause the Total Expenditure of the Consumers to —
(a) Remain the same
(b) Increase
(c) Decrease
(d) Any of these
Answer: C

Question. Total Expenditure of a Consumer increases if —
(i) Demand is elastic and price rises
(ii) Demand is elastic and price falls
(iii) Demand is inelastic and price rises
(iv) Demand is inelastic and price falls
(a) Only (ii)
(b) Only (iii)
(c) Both (i) and (iii)
(d) Both (ii) and (iii)
Answer: D

Question. If Cross Elasticity of Demand --- , Zero, it means that the goods are —
(a) Perfect Complementary Goods
(b) Perfect Substitute Goods
(c) Unrelated Goods
(d) Nothing can be said
Answer: C

Question. Price Elasticity of demand for a product is zero. If the Firm increases the price of the product by 10%, Total Revenue of the Firm will —
(a) Not change
(b) Increase to infinity
(c) Fall to zero
(d) Decrease by 10%
Answer: A

Question. Negative Income Elasticity implies that as income rises, demand for the commodity —
(a) Rises
(b) Falls
(c) Remains unchanged
(d) Becomes zero
Answer: B

Question. if the quantity of blankets demanded increases from 4,600 to 5,700 in response to a decrease in their price from Z 220 to Z 190, the Price Elasticity of Demand for Blankets using Arc Method is —
(a) 0 . 69
(b) 1.0
(c) 1 . 46
(d) 2 .66
Answer: C

Question. When Increase in prices is exactly balanced by a proportionate reduction in the purchase quantity, then Elasticity under Total Outlay Method is —
(a) Equal to unity
(b) Greater than unity
(c) Less than unity
(d) Zero
Answer: A

Question. Which of the following statements is correct?
(a) Higher the value of Advertising Elasticity, greater will be the responsiveness of demand to change in advertisement.
(b) Lower the value of Advertising Elasticity, greater will be the responsiveness of demand to change in advertisement.
(c) Higher the value of Advertising Elasticity, lesser will be the responsiveness of demand to change in advertisement.
(d) None of the above
Answer: A

Question. If a good is a Luxury, its Income Elasticity of demand is
(a) Positive and less than 1
(b) Negative but greater than —1
(c) Positive and greater than 1
(d) Zero
Answer: C

Question. Due to change in price of the commodity, the Total Expenditure remains the same as
(a) Equal to unity
(b) Greater than unity
(c) Less than unity
(d) Zero
Answer: A

Question. Positive Income Elasticity implies that as income rises, demand for the commodity —
(a) Rises
(b) Falls
(c) Remains unchanged
(d) Becomes zero
Answer: A

Question. decrease in price will result in an increase in Total Revenue if —
(a) Percentage Change in Quantity Demanded in less than Percentage Change in Price
(b) Percentage Change in Quantity Demanded is greater than Percentage Change in Price
(c) Demand is inelastic
(d) Consumer is operating along a Linear Demand Curve at a point at which the Price is very low and quantity demanded is very high
Answer: B

Question. Point Elasticity at the mid-point on the Straight Line Demand Curve is -
(a) One
(b) Zero
(c) Less than one
(d) Less than zero
Answer: A

Question. If Cinema Halls are making losses they should lower the ticket fares. This suggestion would only work if the demand for watching movies in cinema halls had a Price Elasticity of —
(a) Zero
(b) Greater than zero but less than one.
(c) One
(d) Greater than one
Answer: B

Question. What is the Original Price of a Product when Price Elasticity is 0.71 and Demand changes from 20 units to 15 units and the new price is Z 10? (Use Arc Method for computation)
(a) Z15
(b) Z18
(c) Z 20
(d) Z 8
Answer: A

Question. Income Elasticity of Demand is given by —
(a) Ai/ Aq X q/ i
(b) Ili/ Aq X i/q
(c) Aq/A1 X q/i
(d) L‘q/A1 X i/q
Answer: D

Question. If Income—Elasticity is greater than zero, then the product is —
(a) Superior
(b) Normal
(c) Infe rior
(d) Both (a) & (b)
Answer: D

Question. Goods having Income Elasticity < 1 are considered as-
(a) Luxury Goods
(b) Necessities
(c) Normal Goods
(d) Inferior Goods
Answer: B

Question. What type of goods does a consumer
(b) Goods with Negative Income Elasticity
(c) Goods with Zero Income Elasticity
(d) No relationship exists between the type of the goods bought and rise in income
Answer: B

Question. Goods having negative Income Elasticity are known as —
(a) Normal
(b) Inferior
(c) Superior
(d) Necessities
Answer: B

Question. If the quantity demanded of Tea increases by 5% when the price of Coffee increases by 20%, the Cross Elasticity of demand between Tea and Coffee is —
(a) —0.25
(b) 0 . 25
(c) 4
(d) 4
Answer: B

Question. If a good has price elasticity greater than one then —
(a) Demand is unit elastic and a change in price does not affect sellers' revenue.
(b) Demand is elastic and a change in price causes Sellers' Revenue to change in the opposite direction.
(c) Demand is inelastic and a change in price causes Sellers' Revenue to change in the same direction.
(d) None of the above is correct.
Answer: B

Question. In case of Inferior Goods, Income Elasticity is —
(a) Zero
(b) Positive
(c) Negative
(d) None
Answer: C

Question. Under Total Outlay Method, if as a result of the decrease in price of a product, the total expenditure on the product rises, we say that Price Elasticity of Demand is —
(a) Equal to unity
(b) Greater than unity
(c) Less than unity
(d) Zero
Answer: B

Question. If Cross Elasticity of Demand is Infinity, it means that the goods are —
(a) Perfect Complementary Goods
(b) Perfect Substitute Goods
(c) Inferior Goods
(d) Normal Goods
Answer: B

Question. ... have a positive Income Elasticity of Demand.
(a) Complementary Goods
(b) Substitute Goods
(c) Normal Goods
(d) Inferior Goods
Answer: C

Question. If an increase in Consumer Incomes leads to a increase in the demand for Product X, then Product X is—
(a) A Normal Good
(b) A Substitute Good
(c) An Inferior Good
(d) None of the above
Answer: A

Question. For goods increase in income leads to increase in demand.
(a) Abnormal
(b) Normal
(c) Inferior
Answer: B

Question. If Income Elasticity > 1, it means that proportion of Income spent on goods ........ , as income of the Consumers increases.
(a) Increases
(b) Decreases
(c) Remains constant
(d) Nothing can be said
Answer: A

Question. Which of the following statements regarding Cross Elasticity is true?
(a) It is always negative
(b) It is always positive
(c) It can be either positive or negative
(d) It always lies between 0 and 1
Answer: C

Question. Advertisement Elasticity is the percentage change in
(a) Supply that occurs for every 1% change in Advertising Expenditure.
(b) Demand that occurs for every 1% change in Advertising Expenditure.
(c) Advertisement expense that occurs for every 1% change in Demand.
(d) None of the above
Answer: B

Question. Income Elasticity of Demand is defined
(a) Price to a change in quantity demanded
(b) Quantity demanded to a Change in Price
(c) Price to a Change in Income
(d) Quantity demanded to a change in income
Answer: D

Question. Services like Air Travel and Movies have an income elasticity of —
(a) More than1
(b) 0
(c) Less than 1
(d) Between 0 and 1
Answer: A

Question. What would be the value of Income Elasticity of demand for the meals in a costly restaurant?
(a) Lesser than one
(b) Between 0 and 1
(c) 1
(d) More than1
Answer: D

Question. Advertising Elasticity is generally
(a) Positive 
(b) Negative 
(c) Zero
(d) None of the above
Answer: A

Question. Generally when income of a consumer increases he goes for superior goods, leading to fall in demand for inferior goods. It means income elasticity of demand is
(a) Less than one
(b) Negative
(c) Ze ro
(d) Unitary
Answer: A

Question. The Income of a Household rises by 20%, the demand for Computer rises by 25%, this means Computer (in Economics) is a/an
(a) Inferior Good
(b) Luxury Good
(c) Necessity
(d) Nothing can be said
Answer: B

Question. Ceteris paribus, what would be the impact on foreign exchange earnings for a given falling export prices, if the demand for the country's exports is inelastic?
(a) Foreign Exchange Earnings decrease
(b) Foreign Exchange Earnings increase
(c) No effect on Foreign Exchange Earnings
(d) Foreign Exchange Earnings increase for a brief period and decrease drastically later on
Answer: A

Question. The Cross Elasticity of monthly demand for ink pen, when the price of gel pen increases by 25% and demand for ink pen increases by 50% is equal to —
(a) + 2.00.
(b) —2.00.
(c) 2 . 09 .
(d) + 2.09.
Answer: A

1 A consumer buys 1000 units of a good at a price of Rs.120 per unit. When the price falls he buys 1400 units. If price elasticity is (-) 2, What is the new price?

2 The quantity demanded of a commodity falls by 5 units when its price rises by Re. 1 per unit. Its price elasticity of demand is (--)1.5 Calculate the price before the change if at this price quantity demanded was 60 units.

3 Calculate price elasticity of demand by percentage method.

   Price per unit     Demand
   Rs. 10                0 units
   Rs. 9                10 units

4 A 2 percent fall in price of good A lead to a fall in expenditure of the consumer on A. A 3 percent rise in price of good B lead to fall in expenditure by the consumer on B. Compare price elasticity of A and B.

5 A consumer buys 10 units of a commodity at the price of Rs. 5 per unit. The price elasticity of demand for this good is -2. Price falls to Rs. 4 per unit. How much of this commodity will he buy now at this price?

6 A household buys 30 units of a commodity when its price is Rs. 5 per unit. The quantity demanded falls to 25 units when the price rises to Rs. 6 per unit. How much is price elasticity of demand.

7 Price elasticity of demand for a good is –0.75. When its price falls by Rs. 1 per unit its quantity demanded rises by 4 units. Calculate quantity demanded if the price before the change was Rs.12 per unit.

8 At a price Rs. 20 per unit, the quantity demanded for a commodity is 300 units. If price falls by 10%, quantity demanded rises by 60 units. Calculate price elasticity of demand.

9 Price elasticity of demand for a good is (--) 0.5. Its quantity demanded falls by 5 units when its price rises by Re.1 per unit. Calculate quantity demanded if price before the change is Re.5 per unit.

11 A consumer spends Rs. 90 on a good when its price is Rs. 9 per unit. When price falls to Rs. 6 per unit, he spends Rs. 120 per unit. Calculate price elasticity by percentage method.

12 A consumer spends Rs. 70 on a good when its price is Rs. 5 per unit. When the price falls to Rs. 4 per unit, he spends Rs. 84. Calculate the price elasticity by percentage method.

13 At a price of Rs 50 per unit, the quantity demanded of a commodity is 1000units. When its price falls by 10 percent, its quantity demanded rises to 1080 units. Calculate price elasticity of demand. Is its demand inelastic? Give reason.

14 Price elasticity of demand for a good is unitary. A consumer buys 50 units of a good when price is Rs. 2 per unit. Using total outlay method of determining price elasticity of demand, calculate how any units of this good will the consumer buy if its price rises to Rs. 4 per unit?

15 If market price of a commodity is Re.4 per unit a sell is willing to sell 600 units of a commodity. When price rises to Re.5, he is willing to sell750 units. What is the price elasticity of supply?

16 As a result of a fall in the price of a commodity form Rs.7/- per k.g to Rs. 5 per k.g.The total expenditure on it increases from Ts. 3500/- to Rs 6250. Calculate price elasticity of demand.

17 A consumer spends Rs.80/- on a commodity when its price is Rs.1/-per unit and spends Rs.96 when its price is Rs 2/- per unit. What is the price elasticity of demand for the commodity?

 

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