Solved Questions- Price Elasticity of Demand using Total Expenditure Approach
1. From the following table, calculate the price elasticity of demand by the percentage method. Price of X ( ₹per unit) Total Expenditure (₹) 4 600 5 525 Solution: The values of Quantity demanded can be calculated with the help of the given formula: Total Expenditure = Price × Quantity Demanded Quantity Demanded = Total Expenditure/ Price Price of X ( ₹per unit) Total Expenditure (₹) Q.D P=4 600 Q=600/4= 150 P 1 =5 525 Q 1 =525/5=105 ΔP = P 1 -P =5-4 = 1 E d =? ...