The coefficient of elasticity of demand is 2. What will be the % change in price if change in the demand is 15%.
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Answer:
(-)1 percent
Explanation:
Price elasticity of demand (Ed) = percentage change in quantity demand\ percentage change in price . Elasticity of demand = -0.2. percentage change in price = 5 per cent. -0.2 = percentage change in quantity demand \5%. percentage change in quantity demanded = -0.2×-5% = (-)1 percentage ; : Demand for the good goes down by percent.
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