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27 June, 04:54

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is Multiple Choice cross-price elastic. price inelastic. price elastic. status quo elastic. derived demand inelastic.

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  1. 27 June, 06:18
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    The correct answer is price inelastic.

    Explanation:

    The price elasticity of demand is the measure of the responsiveness of quantity demanded of a product to the change in its price. It is calculated as the ratio of change in quantity demanded and change in the price.

    Relatively inelastic dmeand refers to the situation where a proportionate change in price causes less than proportionate change in quantity demanded.

    Here, if a 1% decrease in price causes less than a 1% increase in quantity demanded then the demand is relatively inelastic.
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