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As a result of increase in price by 20%,...

As a result of increase in price by 20%, the quantity demanded decreases by 40%. Comment on PED.

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`PED=("Percentage change in Quantity demanded")/("Percentage change in Price")=(-40%)/(20%)=[-]2`
Negative Sign of ED indicates that inverse relationship between price and quantity demanded.
PED = 2[More than unitary elastic demand or Elastic demand].
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