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9 August, 12:09

An elastic demand is one in which: a) Purchases are based on waist band material. b) There is a larger percentage change in quantity wanted than in price. c) There is a larger percentage change in quantity demanded than in price. d) There is a smaller percentage change in quantity demanded than in price.

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  1. 9 August, 15:40
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    The correct answer is option c.

    Explanation:

    The price elasticity of demand shows the effect of change in price of the commodity on the quantity demanded of the commodity. It is calculated by the ratio of proportionate change in quantity demanded to proportionate change in price level.

    When a proportionate change in price leads to greater change in the quantity demanded of the commodity, the price is said to be relatively elastic.

    When a proportionate change in price leads to smaller change in the quantity demanded of the commodity, the price is said to be relatively inelastic.

    So, option c is the correct answer.
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