alleryStart learning →A shop sells 200 units at Rs 50 each. Price rises to Rs 60 and sales fall to 160. What is the demand elasticity magnitude?
AExactly 0.5
BExactly 1
CExactly 2
DExactly 4
Answer & Solution
Correct answer: B. Exactly 1
Price rose 20% and quantity fell 20%, so elasticity has magnitude 1, which is unitary.
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