A consumer spends ₹ 100 on a good priced at ₹ 4 per units. When its price falls by 50% , the consumer continues to spend ₹ 100 on the good. Calculate `P.e_(D)` by percentage method.

Explanation

` (%DeltaQ)/(%DeltaP)`
We need to first find `% delta Q`
`Q=("T.exp")/("price")=(₹100)/("₹ 4 per unit")= 25 "unit"`
` Q_(1)=(T.exp)/("new price")= (₹100)/("₹2 per unit")= 50 "unit"`
`"New price"= ₹4-(50% of ₹ 4)`
4-2 = ₹ 2 per unit
`%DeltaQ= (Q_(1)-Q)/Qxx100=(50-25)/25xx100=100%`
`"Hence" P.e_(D)= (100%)/(-50%)= (-)2`
`|P.e_(D)|=2`