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    Question

    Consider the following demand function of X for a

    commodity A x= 10 + 0.10m/p Money income (m) of X is Rs.120 and the price of A (p) is Rs.3 Now suppose that the price of A falls to Rs.2 What is the substitution effect in this case?
    A 2.00 Correct Answer Incorrect Answer
    B 0.70 Correct Answer Incorrect Answer
    C 1.30 Correct Answer Incorrect Answer
    D 1.50 Correct Answer Incorrect Answer

    Solution

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