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If the price is decreased from rs. 10 to rs 8 of a commodity but the qty demanded remains constant then price elasticity is:- i) 0 ii) 1 iii) infinite iv) none of these?
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If the price is decreased from rs. 10 to rs 8 of a commodity but the q...
Price Elasticity of Demand

To determine the price elasticity of demand (PED) in this scenario, we need to understand the relationship between price changes and the corresponding change in quantity demanded. Price elasticity of demand measures the responsiveness of quantity demanded to a change in price.

Formula for Price Elasticity of Demand
PED = (% Change in Quantity Demanded) / (% Change in Price)

Scenario
In this scenario, the price of a commodity has decreased from Rs. 10 to Rs. 8. However, the quantity demanded remains constant. To calculate the price elasticity, we need to find the percentage change in quantity demanded and the percentage change in price.

Calculation
The change in price is Rs. 10 - Rs. 8 = Rs. 2.
The percentage change in price is (2 / 10) * 100 = 20%.

Since the quantity demanded remains constant, the change in quantity demanded is 0.
The percentage change in quantity demanded is (0 / Q) * 100 = 0.

Therefore, the price elasticity of demand is:
PED = (0 / Q) / (20%)
PED = 0 / Q / 20%
PED = 0

Conclusion
The price elasticity of demand in this scenario is 0. This indicates that the quantity demanded is not responsive to changes in price. Even though the price has decreased, there is no change in the quantity demanded. This suggests that the demand for the commodity is price inelastic.
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If the price is decreased from rs. 10 to rs 8 of a commodity but the q...
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If the price is decreased from rs. 10 to rs 8 of a commodity but the qty demanded remains constant then price elasticity is:- i) 0 ii) 1 iii) infinite iv) none of these?
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If the price is decreased from rs. 10 to rs 8 of a commodity but the qty demanded remains constant then price elasticity is:- i) 0 ii) 1 iii) infinite iv) none of these? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about If the price is decreased from rs. 10 to rs 8 of a commodity but the qty demanded remains constant then price elasticity is:- i) 0 ii) 1 iii) infinite iv) none of these? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If the price is decreased from rs. 10 to rs 8 of a commodity but the qty demanded remains constant then price elasticity is:- i) 0 ii) 1 iii) infinite iv) none of these?.
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