Arun spends 200 rupees on good X irrespective of its price whereas Varun buys 10 units of Good X irrespective of its price. The respective values of the price elasticity of demand for Good X for both the consumers is

1 and 0

The correct answer is Option (2) → 1 and 0

For Arun:

• Arun spends ₹200 on Good X irrespective of its price.

• This means his total expenditure (P × Q) is constant.

• Therefore, when the price increases, he buys less quantity, and when price decreases, he buys more quantity in such a way that P × Q = constant.

• This is the case of unitary elastic demand, where ∣Ed∣=1

For Varun:

• Varun buys 10 units of Good X irrespective of its price.

• His quantity demanded remains constant, no matter how the price changes.

• This indicates perfectly inelastic demand, where ∣Ed∣=0