elasticity doubt jnu 2011

[tim]

Q51. jnu 2011
suppose the price of elasticity of demand of good X is 0.2. if the price of X rise by 2.8%, ht effect will it leave on the total exp of good X ?

i got till till %change in x = .56
after that how did we reach the conclusion that exp will rise by 2.2%. ?

cn someone pls help..

[anon_econ]

hey tim expenditure=P*Q so %change in exp=%change in P + %change in Q. or u can take P and Q to be 100 initially and calculate the actual numbers.

[tim]

so it comes out to be 2.8-.56 = 2.2 ryt ?

thnk u vasudha :)

[PREETY BHOGAL]

HEY PLZZ ELABORATE HOW TO GET THE ANS FOR CHANGE IN Q ?
I HAVE TAKEN P N Q= 100
 THEN M GETTING EXP= 10000

NOW AFTER THE % INCREASE IN P NEW P BECOMES 102.8
AFTER THIS M NT ABLE TO PROCEED ..
HELP!!!

[tim]

i've done this way .2=%change in x/2.8 (%change in p=2.8)
2.8 multiied by .2 = .56
and after this she has explained.

:)

[PREETY BHOGAL]

thnx...i got the ans by some other method...bt the  thing is when exp= p*q then why has she taken p+q ?????

[aditi5000]

what she did is correct.. its the total derivative..