question_answer

                                   A consumer buys 300 units of good Y at Rs. 15.     The Price Elasticity of Demand for the good is 2. At what price, will he be willing to buy 450 units of good Y?

Answer:

Suppose at price X, consumer is willing to buy 450 units of goods Y Here,\[{{E}_{d}}=2;\]P=15;\[{{P}_{1}}\]=Rs X,\[\Delta P\]=Rs(X-15)          Q= 300 units, \[{{Q}_{1}}\]= 450 units                     \[\Delta Q\]= (450 - 300) units = 150 units         \[{{E}_{d}}\]= Price Elasticity of Demand                     P= Actual Price, \[{{P}_{1}}\]= New Price        Q= Actual Quantity, \[{{Q}_{1}}\]= New Quantity        \[\Delta P\] = Change in Price,        \[\Delta Q\] = Change in Quantity Price Elasticity of Demand = The consumer will purchase 450 units of good V at the price of Rs.11.25 per unit.