The manager of the Sell-Rite drug store accidentally mismarked a shipment of 20- pound bags of charcoal at $3.15 instead of the regular price of $4.25. In a week, a total of 180 bags of charcoal was sold. The store normally sells an average of 120 bags per week. What is the store’s arc elasticity of demand for charcoal? Also make an economic interpretation of the elasticity figure.

Price elasticity of demand measures the responsiveness of quantity demanded to a change in price.…

Answered: The manager of the Sell-Rite drug store…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The manager of the Sell-Rite drug store accidentally mismarked a shipment of 20- pound bags of charcoal at $3.15 instead of the regular price of $4.25. In a week, a total of 180 bags of charcoal was sold. The store normally sells an average of 120 bags per week. What is the store’s arc elasticity of demand for charcoal? Also make an economic interpretation of the elasticity figure.

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