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3 August, 15:15

The price elasticity of demand, E, is defined as the:

- Percentage change in quantity demanded times the percentage change in price of that good.

- Unit change in price divided by the unit change in quantity demanded.

- Percentage change in quantity demanded divided by the percentage change in price of that good.

- Unit change in quantity demanded times the unit change in price of that good.

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  1. 3 August, 18:32
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    The correct answer is "Percentage change in quantity demanded divided by the percentage change in price of that good".

    Explanation:

    The elasticity of demand is a measure used in economics to show the degree of response of the quantity demanded of a good or service to changes in the price it presents. It grants the percentage change of the quantity demanded about a unitary percentage change in the price, with the other variables considered constant.

    The E is a measure of the sensitivity of the quantity demanded of a good or service to changes in its price. Its formula normally produces a negative result due to the inverse nature of the relationship between the price and the quantity demanded.

    Have a nice day!
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