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Questions
What is meant by price elasticity of demand?
Define price elasticity of demand.
Define elasticity of demand.
What is price elasticity of demand?
Definition
Short Answer
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Solution 1
Price elasticity of demand refers to the responsiveness or sensitivity of demand to changes in the price of a commodity while other factors stay constant. Alfred Marshall introduced this concept. Alfred Marshall: "Elasticity of demand may be defined as the percentage change in quantity demanded to the percentage change in price.
`"P"_"(Ed)" = "Proportionate change in demand"/"Proportionate change in price"`
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Solution 2
Price elasticity of demand measures the degree of responsiveness of the quantity demanded of a commodity to a change in its price.
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Chapter 4: Elasticity of Demand - TEST YOURSELF QUESTIONS [Page 74]
