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प्रश्न
The price elasticity of demand for a good is - 0.4. If its price increases by 5 percent, by what percentage will its demand fall? Calculate.
उत्तर
`e_d="Percentage in quantity demanded of the good"/"Percentage in price of the good"`
`0.4="Percentage in quantity demanded of the good"/5`
Percentage in quantity demanded of the good = 0.4 x 5 = 2
Hence,as the price increases by 5%, the quantity demanded falls by 2%.
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