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Question
When percentage change in the quantity demanded of a commodity is equal to percentage change in its price, the demand curve for such a commodity will be ______.
Options
unitary elastic
perfectly elastic
perfectly inelastic
none of these
MCQ
Fill in the Blanks
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Solution
When percentage change in the quantity demanded of a commodity is equal to percentage change in its price, the demand curve for such a commodity will be unitary elastic.
Explanation:
When the percentage change in quantity demanded equals the percentage change in price, the elasticity ratio is one. This is unitary elastic demand.
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