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.

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#### Solution

Given that

Q_{1}= 18

Q_{2}= ?

P_{1} = Rs9

P_{2} = Rs10

E_{d} = -1

`E_d=(DeltaQ)/Qxxp/(DeltaP)`

`-1=(Q_2-Q_1)/Q_1xxP/(P_2-P_1)`

`-1=((Q_2-18))/18xx9/(10-9)`

`-1=(Q_2-18)/18xx9/1`

-2=Q_{2}-18

-2+18=Q_{2}

Q_{2}=16

Therefore, the consumer will buy 16 units of the good at a price of Rs 10.

Concept: Elasticity of Demand

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