The price elasticity of demand of a commodity is `(-)1.5`. When its price falls by Rs. 1 per unit its quantity demanded rises by 3 units. If the quantity demanded before the price change was 30 units, what was the price at this demand ?

Explanation

`{:(," PED"=[-]1.5" Given"),("Initial Price [P] = ?","Initial Quantity or quantity demanded before the price change [Q] = 30"),("New Price "[P_(1)]=?,"New Quantity "(Q_(1))=?),(Delta P=-1,Delta Q=3):}`
`PED=(Delta Q)/(Delta P)xx(P)/(Q) " or " (-)1.5 =(3)/((-)1)xx(P)/(30)`
`P=(45)/(3)=15`
So, the price before change, i.e., initial price = 15 at the initial quantity = 30.
Numerical Problems to Calculate Price Elasticity of Demand by Percentage Method.