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If the percentage increase in the quantity demanded of a commodity is less than the percentage fall in its price, then elasticity of demand is ______ -

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Question

If the percentage increase in the quantity demanded of a commodity is less than the percentage fall in its price, then elasticity of demand is ______

Options

  • > 1

  • = 1

  • < 1

  • = 0

MCQ
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Solution

If the percentage increase in the quantity demanded of a commodity is less than the percentage fall in its price, then elasticity of demand is < 1.

Explanation:

Because the percentage change in quantity requested is smaller than the price change. It is somewhat inelastic since its elasticity is less than one.

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