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CBSE Class 12-commerce Answered

Suppose 5% increase in price causes 5% increase in expenditure on the good, what is the price elasticity of demand?
Asked by Topperlearning User | 25 Apr, 2016, 09:33: AM
answered-by-expert Expert Answer

When expenditure on a good is increasing, proportionate to increase in price, the total quantity consumed of the good remains constant. Constant consumption means zero elasticity of demand.

Answered by | 25 Apr, 2016, 11:33: AM
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