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Q.1 REDUCTION IN THE PRICE OF LAPTOP FROM Rs. 30,000 TO Rs. 28,000
PUSHED UP DEMAND FROM 4000 UNITS TO 7000 UNITS. FIND ARC Ed .
Q.7 A MANAGER BELIEVES THAT THE DEMAND FOR HIS PRODUCT IS GIVEN
BY THE EQUATION P = 50 – Q/100. FIND Ed IF PRICE CHANGES FROM Rs. 10
TO Rs. 12.
Q.8 A MARKET CONSISTS OF TWO INDIVIDUALS. THEIR DEMAND EQUATIONS ARE
Q1 = 100 – 4P ; Q2 = 80 – 2P. FIND;
a] MARKET DEMAND FUNCTION
b] Ed FOR THE PRODUCT IN THE MARKET WHEN PRICE RISES FROM Rs. 10
TO Rs. 15.
10 12 15000 80 60
10 15 16000 120 40
12 15 15000 90 30
9 14 17000 90 40
12 17 15000 110 20
12 15 16000 108 50
REDUCTION IN THE PRICE OF LAPTOP FROM Rs. 30,000 FROM Rs. 28,000
PUSHED UP DEMAND FROM 4000 UNITS TO 7000 UNITS. FIND ARC Ed .
= 4/10 = +0.4
SOLUTION : - 3
In order to keep sales volume unchanged, demand for X should rise by 12%
The price of Kitkat is reduced from Rs.10 to Rs.8 i.e. 20% reduction
20% reduction in price of Kitkat will reduce demand for Cadbury by 10%
10 = 50 – Q/100 12 = 50 – Q/100 Ed = DD ÷ DP * P ÷ D
Q/100 = 50 – 10 Q/100 = 50 – 12
= [ -200 ÷ 2 ] * [10 ÷ 4000]
= 180 – 6P
= - 0.5
SOLUTION : - 9
10 12 15000 80 60
10 15 16000 120 40
1
12 15 15000 90 30
2 /4
9 14 17000 90 40
3
12 17 15000 110 20
2 /4
12 15 16000 108 50
1
CALCULATE : 1] Price elasticity of demand for X (- 0.58)
2] Price elasticity of demand for Y (- 3.2)
3] Income elasticity of demand for X (+6.975)
4] Cross elasticity demand for X w.r.t. Price of Y (+1.6)