2018 · Q109
Suppose the price of mangoes increases from 50 per kg to 75 per kg. Due to this, the demand for mangoes declines from 100 kg to 50 kg. Which one of the following is the price elasticity of demand for mangoes?
indian-polity-economyeconomy-fundamentals
- A4
- B3
- C2
- D1
Explanation
Price elasticity of demand = (% change in quantity) ÷ (% change in price). The price rises from 50 to 75, a 50% increase; quantity falls from 100 to 50, a 50% decrease. |−50% / 50%| = 1 — unitary elasticity. Hence 1.