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Question
If the price of a commodity decreases from ₹ 70 per unit to ₹ 60 per unit and the quantity demanded remains the same, then the price elasticity of demand for that commodity will be ______.
Options
Infinity
Zero
One
Less than one
Solution
If the price of a commodity decreases from ₹ 70 per unit to ₹ 60 per unit and the quantity demanded remains the same, then the price elasticity of demand for that commodity will be Zero.
Explanation:
If the price of a commodity decreases and the quantity demanded remains the same, it indicates that the demand for the commodity is perfectly inelastic. In this case, the price elasticity of demand is zero, meaning that the quantity demanded does not respond at all to changes in price.
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