Practice questions chapter elasticity of demand microeconomics Class 11

 

Question

The market demand for a good at ₹ 4 per unit is 100 units. Due to increase in price, the market demand falls to 75 units. Find out the new price, elasticity of demand is (-)1. 

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When the price of good X is ₹ 5, the consumer buys 100 units of good X. At what price would he willing to purchase 140 units of good X ? The price elasticity of demand for good X is 2.

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A consumer buys 80 units ofa good at a price of ₹5 per units. Suppose, the price elasticity of demand is (-)2. At what price will he buy 64 units ? 

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The demand for a good al ₹ 10 per units is 40 units. Price falls by ₹ 5. if price elasticity of demand is (-)3, calculate the new quantity demanded.

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Price elasticity of demand for a product is 'unity'. A houseshold buys 25 units of this product at the price of ₹ 5 per unit. If the price of product rises by ₹ 1, how much quantity of the product will the household buy ?

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When the price of a commodity falls by ₹ 2 per unit , its quantity demanded increases by 10 units . Its price elasticity of demand is (-) 1. Calculate its demanded at the price before change was ₹ 10 per unit. 

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The initial demand for a commodity is 80 units, the demand falls by 4 units due to rise in price by ₹ 10 . If price elasticity of demand is 1.5 calculate the price before change in demand. 

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When price of a commodity falls by 80 % , the quantity demanded of it increases by 100 %. Find out its price elasticity of demand. 

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when pirce of a commodity gets doubled, its quantity demanded reduced to half . Calculate the coefficient of price elasticirty of demand . 

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A 5 % fall in the price of x leads to 10 % rise in the demand for x . A 20 % rise in the price of y leads to 6 % fall in the demand for y. Calculate the price elasticities of demand of x and y. out of x and y, which commondity is more elastic ? 

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A consumer buys 20 units of a good at ₹ 10 per unit. When its price falls by 10%, its demand rises to 22 units. Find out the price elasticity of demand. 

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The qunantity demanded of a commodity at a price of ₹ 8 per unit is 600 units. Its price falls by 25 per cent and the quantity demanded rises by 120 units. Calculate the price elasticity of demand . Is its demand elastic ? Give reason for your answer.

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Calculate the price elasticity of demand for a commodity when its price increase by 25% and quantity demanded falls from 150 units to units. 

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The price of commodity is ₹ 15 per unit and its quantity demanded is 500 units. Its quantity demanded rises by 80 units as a result of fall in its price by 20 per cent. Calculate its price elasticity of demand. Is its demand inelastic ? Give reason for your answer.

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Question

When the price of a commodity is ₹ 20 per unit, its quantity demanded units. When its price rises by ₹ 5 per unit, its quantity demanded falls by 20 per cent. Calculate its price elasticity of demand. Is its demand elastic? Give reasons for answer. 

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Question

when price of a good falls from ₹ 5 to ₹ 3 per unit, its demand rises by 40 % . Calculate its price elasticity of demand. 

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Question

Calculate price elasticity of demand:  

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A consumer spends ₹ 80 on a commondity when its price is ₹ 1 per unit and spends ₹ 96 when its price is ₹ 2 per unit. Calculate price elasticity of demand for the commodity by the percentage method ? 

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Question

A dentist was Charging ₹ 300 for a standard cleaning job and it used to generate total revenue equal to ₹ 30,000 per month. She has , since las month , increased the price of dental cleaning to ₹ 350. As a result, fewer customers are now coming for dental cleaning, but the total revenue is now ₹ 33,250 .from this, what can we conclude about the elasticity of demand for her dental service ? 

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Question

With rise in price from ₹ 8 to ₹ 14 , total expenditure on the commodity rises by 40% and becomes ₹1,120. Calculate price elasticity of demand. Also, indicate whether demand. Also, indicate whether demand is elastic or inelastic.

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The price elasticity of demand for good X is knownto be twice that of good Y. Price of X falls by 5 % while of good Y rises by 5% . What is the percentage change in the quantities demanded of X and Y ? 

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The price elasticities of demand for goods X and Y are known to be 1 and 2 respectively. Price of X rises by 5% while that of good Y falls by 5%. What are the percentage changes in the quantities demanded of X and Y ? 

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Question

The demand for goods X and Y have equal price elasticity. The demand of X rises from 100 units to 250 units due to a 20 per cent fall in its price. Calcualte the percentage rise in demand of Y, if its price falls by 8 per cent. 

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Question

The price elasticity of demand of good X is half the price elasticity of demand of good Y. A 25% rise in the price of good Y reduces its demand from 400 units to 300 units. Calculate percentage rise in demand of good X when its price falls from ₹ 10 to ₹ 8 per unit. 

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Question

The Percentage change in demand is three times the percentage change in price. If original demand was 30 units at the price of ₹ 7 per unit, then calculate the price elasticity of demand, given price increased by 10% . Indicate whether the demand is elastic or not. Also calculate the new quantity demanded. 

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Question

In case of commodity 'B' the ratio of change in pirce (Δ𝑃)${\displaystyle (\Delta P)}$ to original price (P) is (-) 0.4. if price elasticitly of demand is (-) 0.5, calculate the percentage change in quantity demanded. 

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If ratio of Change in quantity (Δ𝑄)${\displaystyle (\Delta Q)}$ to original quantity Q is 0.5 and elasticity of demand is (-) 1.25, calculate the percentage change in price. 

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If Δ𝑄𝑄=−0.6${\displaystyle \frac{\Delta Q}{Q}=-0.6}$ and price elasticity is (-) 0.75, calculate the percetage change in price.Also Calculate the new expenditure if initital expenditure was ₹500 at the price of ₹20. 

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Question

The demand funcation of Commodity 'X' is given as : 𝑄𝑥=20−2𝑃𝑥${\displaystyle Q_x=20-2P_x}$. Calculate its price elasticity of demand when price falls from ₹ 5 to ₹3.

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Question

The demand for commodity 'A' rises by 20% due to fall in proce by ₹ 2 form the original price of ₹8. 
(i) Calculate elasticity of demand by 'Percentage Method'. 
(ii) Whether demand of 'A' is elastic or inelastic ? Give reason for your answer. 
(iii) What will be the shape of demand curve of A ?  
(iv) If new demand of Commodity 'A' is 84 units , then calculate its original demand. 

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Question

If the price of X is ₹ 2 and the elasticity of demand is 0.4 , how much will a 10 percent reduction in quantity demanded increase the price ? If the new quantity demanded is 9 units, will the total spending on X rise ? If so, by what percentage ?

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Question

when price of a good is ₹ 7 per unit, a consumer buys 12 units. When price falls to ₹ 6 per unit, he spends ₹ 72 on the good. Calculate price elasticity of demand by using the percentage method. Comment on the likely shape of demand curve based on this measure of elasticity.

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Question

The demand curve for the commondity is given as 𝐷𝑥=20−2𝑃${\displaystyle D_x=20-2P}$. If slope of the demand curve is (-2), calculate price elasticity of demand for the commodity when the price of the commodity is ₹5 per unit. 

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Question

The demand curve of a commodity is expressed as 𝐷𝑥=40−5𝑃${\displaystyle D_x=40-5P}$ . If slope of the demand curve is given to be (-2) , calculate price elasticity of demand for the commodity when demand is 20 units. 

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Question 

What is the Elasticity of Demand?

Ans: Elasticity of Demand refers to the percentage change in demand for a commodity with respect to the percentage change in any of the factors affecting demand for that commodity.

$\begin{array}{l}\frac{PercentagechangeindemandforX}{PercentagechangeinafactoraffectingthedemandforX}\end{array}$

Question 

What are the 5 Degrees of Elasticity of Demand?

Ans: 5 types of price elasticities of demand are:

• Perfectly elastic demand
• Perfectly inelastic demand
• Highly elastic demand
• Less elastic demand
• Unitary elastic demand

Question 

What are the factors that affect the price elasticity of demand?

Ans: Factors affecting the price elasticity of demand are:

• Nature of commodity
• Availability of substitutes
• Income level
• Level of price
• Number of uses
• Time period
• Habits

Question 

The demand for a good falls to 240 units in response to the rise in price by ₹.2. If the original demand was 300 units at the price of ₹.20, calculate the price elasticity of demand.

New Quantity ( $\begin{array}{l}{}_{Q_1}\end{array}$ ) = 240 Units	Rise in Price ( $\begin{array}{l}\mathrm{△}P\end{array}$ ) = ₹2
Original Quantity (Q) = 300 Units	Original Price = ₹ 20
Change in Quantity ( $\begin{array}{l}\mathrm{△}Q\end{array}$ ) = -60 Units	New Price ( $\begin{array}{l}{}_{P_1}\end{array}$ ) = ₹ 22
Elasticity of demand  $\begin{array}{l}{}^{{}_{E_d}}\end{array}$ = ?

$\begin{array}{l}PriceelasticityofDemand{}_{E^{{}_d}}=\frac{\mathrm{△}Q}{\mathrm{△}P}\times \frac{P}{Q}=\frac{-60}{2}\times \frac{20}{300}=(-)2\end{array}$

Solution:

$\begin{array}{l}{}_{E_d}=(-)2(Demandishighlyelasticas{E}_d>1)\end{array}$

State whether the following statements are true or false.

Question 

A commodity with a large number of close substitutes shows high elasticity of demand.

Ans: True

Question 

In the case of the horizontal straight line demand curve, demand does not change even with the change in price.

Ans: False

What are the 6 factors that affect demand?

The factors that affect demand are as follows:

1. Price of product
2. Consumer’s Income.
3. Price of Related Goods.
4. Tastes and Preferences of Consumers.
5. Consumer’s Expectations.
6. Number of Consumers in the Market.

What is the basic law of demand?

Basic law of demand states that price and quantity demanded are inversely related to each other while keeping all other factors constant. Increase in price lowers the demand for any goods or services.

What increases demand for a normal good?

Demand for normal goods increases with respect to rise or increase in consumer’s income.

Question

When price is ₹ per unit, demand for a commodity is 100 units. As the price falls to ₹ 8 per unit , demand expands to 150 units. Calculate elasticicty of demands.

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Question

when price of sugar is ₹ 5 per Kg, its demand is 50 Kg. when price rises by ₹ 5 per kg, its demand falls by 10 Kg. Calculate the elasticity of demand.

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Question

The demand for a good falls to 240 units is respone to rise in price by ₹ 2. if the original demand was 300 units at the price of ₹ 20, calculate price elasticity of demand.

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