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Xplain the practical importance of elasticity of demand in field of I. ProductionII. Distribution &III. Public Finance |
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Answer» Answer: The concept of elasticity for demand is of great importance for DETERMINING prices of VARIOUS factors of production. Factors of production are PAID according to their elasticity of demand. In other words, if the demand of a FACTOR is inelastic, its price will be high and if it is ELASTIC, its price will be low. (the answer is production.) |
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