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Question
In the following Question, read the following statement and choose the correct alternative among those given:
Statement 1: Coefficient of price elasticity of demand ranges from one to infinity.
Statement 2: The coefficient of price elasticity of demand is a pure number and is independent of price and quantity units.
Options
Both the Statements are true.
Both the Statements are false.
Statement 1 is true and Statement 2 is false.
Statement 2 is true and Statement 1 is false.
MCQ
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Solution
Statement 2 is true and Statement 1 is false.
Explanation:
Price elasticity can range from zero to infinity, so Statement 1 is false. It is a unit-free measure because it uses percentage changes, making Statement 2 true.
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