Short Answer TypeUnemployment is reduced due to the measures taken by the government. State its economic value in the context of production possibilities frontier.
A consumer buys 18 units of a good at a price of Rs. 9 per unit. The price elasticity of demand for the good is (−) 1. How many units the consumer will buy at a price of Rs. 10 per unit? Calculate.
Initial quantity demanded = 18
Initial price =Rs 9 per unit
New price = Rs 10 per unit
Price elasticity of demand (-)1
Price elasticity of demand (ed) = Percentage change in quantity demanded/ Percentage change in price.
ed = (△Q/Q)÷(△P/P)
-1 = (Q2-18)/18 * 9/(10-9)
-1 = (Q2-18)/18 *9/1
(-1/9)*18 = (Q2-18)
-2= (Q2-18)
-2+18 = Q2
Q2 = 16
Therefore, at a price of Rs 10, the consumer will buy 16 units of the goods.
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