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Question
If the price elasticity of demand for a commodity is 2 and the percentage change in price is 5, the percentage change in quantity demanded will be ______.
Options
3
2.5
10
7
Solution
If the price elasticity of demand for a commodity is 2 and the percentage change in price is 5, the percentage change in quantity demanded will be 10.
Explanation:
`"Price elasticity of demand" = "Percentage charge in quantity demanded"/"Percentage change in price"`
`2 = "Percentage charge in quantity demanded"/5`
∴ Percentage charge in quantity demanded = 10
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