Answer:
Percentage change in Price = \[(-)\,\,10%\] Q = 150 units \[{{Q}_{1}}\] = 180 units. Ed =\[(-)\,\frac{%\Delta d}{%\Delta P}\] Ed = \[\frac{20%}{10%}\] Thus, price elasticity = \[{{Z}_{0}}\] And, if Ed = 2, Q = 150 units, \[{{Q}_{1}}\] = 210 units % change in quantity demanded\[=\frac{210-150}{150}\,\,\times \,\,100\] \[=\frac{60}{150}\,\,\times \,\,100\,\,=\,\,40%\] \[Ed\,\,=\,\,(-)\,\,\frac{40}{x}\,\,%\] \[2=(-)\,\,\frac{40}{x}%\] \[2x\,\,=\,\,\left( - \right)\,\,40%\] \[x\,\,=\,\,-\,\,20%\] Therefore percentage fall in price will be 20%.
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