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The elasticity of demand for a firm’s product is 2. If the firm reduces its…

The elasticity of demand for a firm’s product is 2.
If the firm reduces its price by 20 percent, its sales revenue will increase by?
  • A.
    10 per cent
  • B.
    20 per cent
  • C.
    30 per cent
  • D.
    40 per cent
Correct Answer: Option D
Explanation