Q-9) What does the negative sign of Ed represents ?
Q-10)Define elastic demand.
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- The negative sign means that the good is inferior, and, because the coefficient is less than one, demand for the good does not respond significantly to a change in income.
- What is the meaning of elastic demand?
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Key Takeaways
Elasticity of demand refers to the change in demand when there is a change in another factor, such as price or income. If demand for a good or service is static even when the price changes, demand is said to be inelastic. Examples of elastic goods include luxury items and certain food and beverages.
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