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A firm finds that its price elasticity of demand is 4.0. Currently, the firm is selling 2000 units per month at $5 per um If it wishes to increases its quantity sold by 10%, it must lower its price by: a. 5.40 b. 4.0% c. 2.5% d. $.50

A firm finds that its price elasticity of demand is 4.0. Currently, the firm is selling 2000 units per month at $5 per um If it wishes to increases its quantity sold by 10%, it must lower its price by: a. 5.40 b. 4.0% c. 2.5% d. $.50

Economics (MindTap Course List)
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter19: Elasticity
Section: Chapter Questions
Problem 8QP
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A firm finds that its price elasticity of demand is 4.0. Currently, the firm is selling 2000 units per month at $5 per unit. If it wishes to increases its quantity sold by 10%, it must lower its price by: a. $.40 b. 4.0% c. 2.5% d. $.50
Transcribed Image Text:A firm finds that its price elasticity of demand is 4.0. Currently, the firm is selling 2000 units per month at $5 per unit. If it wishes to increases its quantity sold by 10%, it must lower its price by: a. $.40 b. 4.0% c. 2.5% d. $.50
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