Due to the COVID-19, the price of hand-sanitizer increases from 150 taka to 250 taka. In response, the quantity demanded declines from 20 units to 15 units. (a) Calculate the price elasticity of demand. (b) Explain if the demand is elastic or inelastic. Based on the elasticity, what change (increase, decrease, or keep it the same) in price the seller can do to maximize his total revenue? Explain your answer.
Due to the COVID-19, the price of hand-sanitizer increases from 150 taka to 250 taka. In response, the quantity demanded declines from 20 units to 15 units. (a) Calculate the price elasticity of demand. (b) Explain if the demand is elastic or inelastic. Based on the elasticity, what change (increase, decrease, or keep it the same) in price the seller can do to maximize his total revenue? Explain your answer.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Due to the COVID-19, the
(a) Calculate the
(b) Explain if the demand is elastic or inelastic. Based on the elasticity, what change (increase, decrease, or keep it the same) in price the seller can do to maximize his total revenue? Explain your answer.
Please answer Step by step. Answer must be correct.Do all calculation step by step.Don,t copy from any where. Must answer follow question.
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