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Analysing Comparative Statement of Profit and Loss

The demand fo...

Question

The demand for a commodity does not change with increase in its price from Rs. 5 to Rs. 10. What is its elasticity of demand ?

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Solution

Elasticity of Demand measures the percentage change in the quantity of a good demanded with respect to change in its price. Thus, in this case, the elasticity of demand is zero (or $E_{d} = 0$ ) because change in price causes no change in demand.

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