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Unformatted text preview: The following week a new discount bookstore opens and begins to sell the same trashy novels for $2.00 a piece. 6. What happens to Mildreds consumption after the discount bookstore opens (and after the used bookstore closes)? 7. What percent change occurs in the price she pays for books? 8. What percent change occurs in demand? 9. What is the price elasticity of her demand with this price change? How would you characterize this elasticity? Two weeks later the owner of the used bookstore had a change of heart and decided to reopen his humble little shop. 10. If the shop keep charges the same prices he did before, what will be the price elasticity of Mildreds demand after the used bookstore reopens (changes from discount bookstore to used bookstore)? How would you characterize this elasticity?...
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This note was uploaded on 02/26/2008 for the course ECO 001 taught by Professor Gunter during the Fall '06 term at Lehigh University .
- Fall '06