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Q109 (CAPF/2018) Economy › Basic Concepts & National Income › Demand theory basics Answer Verified

Suppose the price of mangoes increases from ? 50 per kg to f 75 per kg. Due to this, the demand for mangoes declines from 100 kg to 50 kg. Which one of the following is the price elasticity of demand for mangoes?

Result
Your answer: —  Â·  Correct: D
Explanation

The price elasticity of demand (PED) measures the responsiveness of quantity demanded to a change in price [3]. It is calculated as the percentage change in quantity demanded divided by the percentage change in price. In this scenario, the price of mangoes increases from ₹50 to ₹75, which is a 50% increase ([(75-50)/50] × 100) [3]. Simultaneously, the quantity demanded declines from 100 kg to 50 kg, representing a 50% decrease ([(50-100)/100] × 100) [3]. Using the point elasticity formula, the PED is the absolute value of (-50% / 50%), which equals 1. When the percentage change in quantity is exactly equal to the percentage change in price, the demand is described as unitary elastic. Therefore, the price elasticity of demand for mangoes in this case is 1.

Sources

  1. [1] Microeconomics (NCERT class XII 2025 ed.) > Chapter 2: Theory of Consumer Behaviour > EXAMPLE 2.2 > p. 28
  2. [3] https://www.khanacademy.org/economics-finance-domain/microeconomics/elasticity-tutorial/price-elasticity-tutorial/a/price-elasticity-of-demand-and-price-elasticity-of-supply-cnx
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