D2

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 3QFR

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Question

Explain the term price elasticity of demand? How is it measured? What factors influence market demand for products? If the price elasticity is -3 and USD200 is the marginal cost of product X, what should be the optimal sale price? (Hint: apply the mark-up rule)

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