The management believes that every 6% increase in the selling price of one of the company’s products leads to 12% decrease in the product’s total unit sales. Tax rate is 25%. The product’s price elasticity of demand is closest to: a. -0.13 b. -0.83 c. -1.64 d. -1.75 e. -2.19 f. -2.74
The management believes that every 6% increase in the selling price of one of the company’s products leads to 12% decrease in the product’s total unit sales. Tax rate is 25%. The product’s price elasticity of demand is closest to: a. -0.13 b. -0.83 c. -1.64 d. -1.75 e. -2.19 f. -2.74
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The management believes that every 6% increase in the selling price of one of the company’s products leads to 12% decrease in the product’s total unit sales. Tax rate is 25%. The product’s price elasticity of demand is closest to:
a. -0.13 b. -0.83 c. -1.64
d. -1.75 e. -2.19 f. -2.74
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