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Problem 1 &2

At a given price of commodity a consumer buys 120 units. When price falls by 50 % he buys 150 units. Calculate the price elasticity of demand. Price elasticity of demand of a good is (-)3. If the price rises from Rs. 10 per unit to 12 per unit. What is % change in demand?
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Problem 3 & 4

The quantity demanded of a commodity rises from 800 units to 850 units, when its price falls from Rs.20 to Rs.19 per unit. Calculate its elasticity of demand. Price elasticity of demand for a commodity is (-) 1. The consumer buys 50 units at Rs. 2 per unit of price. How many units will the consumer buy if the price rises to Rs. 9/12/12

Problem-5 &6

A 5 % fall in price of a good leads to 10 % rise in its demand. A consumer buys 40 units of the good at a price of Rs. 10 per unit. How many units will the consumer buy at a price of Rs. 12 per unit? Calculate A 5 % rise in price of a good leads to 5 % fall in demand. He buys 100 units at Rs. 5 per unit. At what price he will buy 120 units? 9/12/12

Problem-7

From the information given below, compare the elasticity of demand for commodity X and Y .
Commodity X Price (Rs) 2 3 Quantity Demanded 100 40 Commodity Y Price (RS) 4 6 Quantity Demanded 100 60

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Problem -8
Yesterday, the price of envelopes was $3 a box, and Julie was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Julie is now willing to buy 8 boxes. Is Julie's demand for envelopes elastic or inelastic? What is Julie's elasticity of 9/12/12 demand?

Problem -9
If Neil's elasticity of demand for hot dogs is constantly 0.9, and he buys 4 hot dogs when the price is $1.50 per hot dog, how many will he buy when the price is $1.00 per hot dog?

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Problem -10
Which of the following goods are likely to have elastic demand, and which are likely to have inelastic demand? Home heating oil Pepsi Chocolate Water Heart medication 9/12/12 Oriental rugs

Problem -11
If supply is unit elastic and demand is inelastic, a shift in which curve would affect quantity more? Price more?

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Problem -12
Katherine advertises to sell cookies for $4 a dozen. She sells 50 dozen, and decides that she can charge more. She raises the price to $6 a dozen and sells 40 dozen. What is the elasticity of demand? Assuming that the elasticity of demand is constant, how many 9/12/12 would she sell if the price were

Problem -13

In Navi Mumbai, the subway fare has just been increased from a level of Rs. 50 to Rs. 100per ride for commercial vehicles with 6 and above wheels. As a result, the transit authority noted a decline in the usage by this category by 30%.1.Compute the price elasticity of demand for the subway use.2.If the old price 9/12/12 were restored, what would be

Problem-14
If the marginal revenue from a product is Rs. 15, and the price elasticity of demand is 1.2,what is the price of the product?

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Problem-15
Total revenue of Kolkata's public transport authority is Rs. 500 crore while its total cost is Rs. 600 crore. Avg. fare for a ride is Rs. 5, and the price elasticity of demand for public transport is - 0.5. Under the new govt. policy, all public sector undertaking have to eliminate their deficits. If the transport authority can not 9/12/12 increase the cost, what price it