when price of a good is ₹ 7 per unit, a consumer buys 12 units. When price falls to ₹ 6 per unit, he spends ₹ 72 on the good. Calculate price elasticity of demand by using the percentage method. Comment on the likely shape of demand curve based on this measure of elasticity.

Answer

Price Elasticity of Demand `(E_(d))=0` the demand curve is parallel to the Y-axis.

Explanation

Price Elasticity of Demand `(E_(d)) = (" percentage Change in Quantity Demanded")/("percentage Change in price")`
Percentage Change in Demand = `(DeltaQ)/(Q)xx 100 = 0/12 xx 100 = 0 `
We Know , 0 (zero) divided by any number gives 0.So` E_(d)=0` and demand curve will be parallel to the Y- axis.