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11 February, 01:56

When the price of a textbook falls by 4 percent, the quantity demanded of textbooks increases by 5 percent. What is the price elasticity of demand for textbooks ?

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  1. 11 February, 01:59
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    The price elasticity of demand for textbooks is 1.25

    Explanation:

    Price elasticity of demand is given by percentage change in quantity demanded divided by percentage change in price

    Percentage change in quantity of textbooks demanded = 5%

    Percentage change in the price of a textbook = 4%

    Price elasticity of demand for textbooks = 5% : 4% = 1.25
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