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Description of Price Elasticity of Demand

Suppose that 50 units of a good are demanded at a price of $1 per unit. A reduction in price to $.20 results in an increase in quantity demanded to 70 units. Show that these data yieled a price elasticity of .25. By what percentage would a 10% rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M926102

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