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Q. Relationship between L and P?
• As long as L is smaller than LB, L may change with no change in prices. In this range, there is no relation between L andP. • When L is between LB and LC then L increases with P. • L cannot be greater than the LC.
The chart below illustrates the relationship between L and P
Figure: The relationship between L and P
The price level is the monetary value of a good or service.
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