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Ken Garrett.
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myacca101
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Question:
The current selling price of X has raised from $1 to $1.50, annual demand will drop from 100,000 units to 90,000 units.
The price elasticity of demand is mentioned as 0.2 in solution.
Please explain how 0.2 is the asnwer.
Ken Garrett
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Proportional rise in price = 50%
Proportional fall in volume = 10%
10/50 = 0.2
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