A consumer spends Rs. 80 on a commodity when price is Rs. 1 per unit. If the price increases by Rs. 1, what would be his expenditure. `PED =-0.4` ?

Explanation

`{:("Initial Price (P) = 1","Initial Expenditure = 80","Initial Quantity (Q) "=("Exp.")/("Price")=80),("New Price "(P_(1))=2,"New Expenditure = ?","New Quantity "(Q_(1))=?),(Delta P=1,,Delta Q=?):}`
`PED =(Delta Q)/(Delta P)xx(P)/(Q) " or " -0.4=(Delta Q)/(1)xx(1)/(80)`
`-32=Delta Q`
As New Price is increasing from 1 to 2, quantity demanded must decrease by `Delta Q`.
New Quantity = Initial Quantity `+Delta Q=80+(-32)=48`
At Price = 2, Quantity demanded = 48.
The Expenditure at this Price `= P xx Q=2xx48=96`