Price elasticity of demand for flowers and toys are respectively $(-) 0.9$ and $(-) 0.5$ . Demand for which one is more elastic and Why?

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Solution

Demand for flowers will be more elastic than toys because percentage change in quantity demanded is more responsive to a given percentage change in price in the case of flowers than in the case of toys. Negative sign as a prefix to the elasticity of demand only signifies the inverse relationship between price and quantity demanded of a commodity.

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