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9 February, 21:17

The narrower the definition of a product, Multiple Choice the smaller the number of substitutes and the smaller the price elasticity of demand. the smaller the number of substitutes and the greater the price elasticity of demand. the larger the number of substitutes and the greater the price elasticity of demand. the larger the number of substitutes and the smaller the price elasticity of demand.

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  1. 9 February, 21:45
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    The larger the number of substitutes and the greater the price elasticity of demand.

    Explanation:

    Price elasticity of demand can be used to explain a case of this type where it shows the relationship between price and quantity demanded and provides a precise calculation of the effect of a change in price on quantity demanded.

    The degree of response of quantity demanded to a change in price can vary considerably. The key benchmark for measuring elasticity is whether the co-efficient is greater or less than proportionate. If quantity demanded changes proportionately, then the value of PED is 1, which is called 'unit elasticity'.
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