If a 7% increase in the price of good-X causes a 7% increase in the expenditure on good-X, then the price elasticity of demand = 1.

Yes

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Solution

The correct option is B
No

No. It is a situation of zero price elasticty of demand. Because, when expenditure on the commodity is increasing proportionate to increase in price, total purchase of the commodity remains constant. Constant purchase means zero elasticty of demand.

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If a 7% increase in the price of good-X causes a 7% increase in the expenditure on good-X, then the price elasticity of demand = 1.

The correct option is B No No. It is a situation of zero price elasticty of demand. Because, when expenditure on the commodity is increasing proportionate to increase in price, total purchase of the commodity remains constant. Constant purchase means zero elasticty of demand.

The correct option is B
No

No. It is a situation of zero price elasticty of demand. Because, when expenditure on the commodity is increasing proportionate to increase in price, total purchase of the commodity remains constant. Constant purchase means zero elasticty of demand.