Small Doubt

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Small Doubt

Ashima
If the price of cigarettes increases by 22% and the quantity cigarettes demanded falls by 25%.
this indicates that demand of cigarettes is
A less elastic
B inelastic
C unitary elastic
D perfectly elastic
E NOTA

Will it be E?
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Re: Small Doubt

Dreyfus
PED is greater than 1 and less than infinite, thus its relatively elastic and thus it should be none of the above as I am assuming "less elastic ( in option a)" being less than unitary elastic.
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Re: Small Doubt

Ashima
That is the same doubt I am having, as to 'relative to what' is less elastic. Thanks anyways. :)
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Re: Small Doubt

Dreyfus
I think in that less elastic means less than one for one change in qty ie Ed is b/w 0 and -1. So that it strikes out option a and thus left with option E only.