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In the first week after Apple’s iTunes raised the price on its most popular songs from 99¢ to $1.29, the quantity demanded of Joyner’s “OJ and Ramen” fell approximately 9.4% to 52,760 units from the 57,941 units sold in the previous week. What is the arc elasticity of demand for “OJ & Ramen” based on the average price and quantity?

In the first week after Apple’s iTunes raised the price on its most popular songs from 99¢ to $1.29, the quantity demanded of Joyner’s “OJ and Ramen” fell approximately 9.4% to 52,760 units from the 57,941 units sold in the previous week. What is the arc elasticity of demand for “OJ & Ramen” based on the average price and quantity?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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  1. In the first week after Apple’s iTunes raised the price on its most popular songs from 99¢ to $1.29, the quantity demanded of Joyner’s “OJ and Ramen” fell approximately 9.4% to 52,760 units from the 57,941 units sold in the previous week. What is the arc elasticity of demand for “OJ & Ramen” based on the average price and quantity?

 

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