Due to 5% fall in price of a commodity its demand rises by 7. 5%. Calculate and state coefficient of price elasticity of demand. Whether the demand is elastic or inelastic? Give reason
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Elastic demand occurs when changes in price cause a disproportionately large change in quantity demanded. For example, a good with elastic demand might see its price increase by 10%, but demand drop by 30% as a result. The PED of the good is 4.2, which is considered to be elastic
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