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27 May, 23:46

If the price elasticity of demand coefficient is 4, then:a. a price increase of 1% will reduce quantity demanded by 1/4%b. A price increase of 1% will reduce quantity demanded by 4%c. A price increase of 1% will reduce quantity demanded by 1/4%d. A price decrease of 1% will reduce quantity demanded by 1/4%

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  1. 28 May, 00:44
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    A price increase of 1% will reduce quantity demanded by 4%

    Explanation:

    If the price elasticity is 4 then, this demand is highly responsive to changes in price.

    So it will decrease by more than the price increase.

    we must remember that the price-elasticity is determinate like:

    ↓QD / ΔP = price-elasticity

    if the cofficient is 4 then a 1% increase in price:

    ↓QD / 0.01 = 4

    ↓QD = 0.04

    Quantity demanded will decrease by 4%
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