Wk 1 assignment - that price to $60, what happens to total...

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A sporting goods store has estimated the demand curve for a popular brand of running shoes as a function of price. Use the diagram to answer the questions that follow. Calculate demand elasticity using the midpoint formula between points A and B, between points C and D, and between points E and F. b. If the store currently charges a price of $50, then increases
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Unformatted text preview: that price to $60, what happens to total revenue from shoe sales (calculate PxQ before and after the price change)? Repeat the exercise for initial prices being decreased to $40 and $20, respectively. c. Explain why the answers to a. can be used to predict the answers to b....
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This note was uploaded on 03/29/2010 for the course ECO 204 taught by Professor Perkins during the Spring '09 term at Ashford University.

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