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Determinants of Demand
Price elasticity of demand fluctuates from commodity to commodity. Whereas the demand of some commodities is highly elastic, demand for others is highly inelastic. In this segment, we will illustrate the main determinants of the price elasticity of demand.
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Decrease in Demand At the initial equilibrium price P 1 , quantity demanded falls from q 1 to q d . But the quantity supplied is still q 1 at this price. Hence, this
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