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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4
When that magnitude is greater than one, demand is defined to be elastic
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4.1. Own-Price Elasticity of Demand
States. When demand is not very sensitive to price, we say demand is inelastic . To be precise, when the magnitude(ignoring algebraic sign) of the own-price elasticity coefficient has a value less than one, demand is defined to be inelastic. <span>When that magnitude is greater than one, demand is defined to be elastic . And when the elasticity coefficient is equal to negative one, demand is said to be unit elastic , or unitary elastic . Note that if the law of demand holds, own-price elasticity of


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