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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

B 0.70

C 1.30

D 1.50

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