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17 June, 00:46

A 5 percent increase in the price of milk that results in a 2 percent decrease in the quantity of milk demanded yields a price elasticity of demand for milk of:

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  1. 17 June, 01:20
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    A 5 percent increase in the price of milk that results in a 2 percent decrease in the quantity of milk demanded yields a price elasticity of demand for milk of "0.4".

    Price Elasticity of Demand (PED) is characterized as the responsiveness of amount requested to an adjustment in cost. The interest for an item can be versatile or inelastic, contingent upon the rate of progress in the interest regarding the adjustment in the cost.

    Price Elasticity of Demand (PED) = percentage in Q. D / percentage change in price

    by putting the given values in formula;

    PED = 2/5 = 0.4
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