A consumer demands 40 kg of a commodity when its price is Rs. 1 per kg. If the price increases by Rs. 0.10, what would be the quantity demanded ? PED `=-1`.

Explanation

`{:(" Elasticity of demand "=-1),("Original Quantity (Q) = 40 Original Price (P) = 1"),("New Quantity "(Q_(1))=? " New Price "(P_(1))=1.1),("Change in Quantity " (Delta Q)=? " Change in Price " (Delta P)=0.1):}`
`PED =(Delta Q)/(Delta P)xx(P)/(Q) " or " -1=(Delta Q)/(0.1)xx(1)/(40)`
`Delta Q=-4`
As, price is increasing, then quantity demanded must decrease by 4.
So, New Quantity = Initial quantity `+ Delta Q=40+(-4)=36`