The Price ` P.e_(D)` for a good x is twice that of good y. price of x falls by 5% and of y rises by 5% and of y rises by 5% . Find out % change in quantities demanded of x and y.

Explanation

Let us assume `P.e_(D)of y=1`
` P.e_(D)= of x = 2` ( Twice of `P.e_(D)` of y , as given in Question)
1. x , `p.e_(D) = (% "Change in" QD_(x))/ (% " Change in" P_(x))`
`2= ( % " Change in" QD_(x))/(5%)`
` % " Change in " QD_(x) = 10%`
2. y, `P.e_(D) = ( % " Change in " QD_(y))/ ( % " Change in " P_(y))`
`1 = ( % " Change in " QD_(y)) / (5%) `
% change in `QD_(y) 5%`
Quantity of x will rise by 10%, Quantity of y will fall by 5%.