A consumer buys 70 units of a good at a price rs 7 per unit.when price falls to rs 6 per unit ,he buys 90 units. calculate price elasticity of demand
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Demand is unit elastic at the quantity where marginal revenue is zero. Demand is inelastic at every quantity where marginal revenue is negative. ,The price elasticity of demand (which is often shortened to demand elasticity) is defined to be the percentage change in quantity demanded, q, divided by the percentage change in price, p. The formula for the demand elasticity (ǫ) is: ǫ = p q dq dp .
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