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The coefficient of price elasticity is a pure number showing the extent or relationship between the change in price and the change in quantity demanded. Thus, if EP is the coefficient of elasticity, then

**EP = Percentage change in quantity demanded / ****Percentage change in price**

When EP is more than one, then demand is more elastic and when less than one demand is less elastic. When EP is equal to one, it shows a unit elasticity of demand, i.e. that the change in price is followed by an equi - proportional change in demand and when EP = zero, demand is said to be completely inelastic. On the other extreme, if EP is equal to infinity, demand is said to be perfectly elastic.

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