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Question

You are the manager of a local tea shop called Unicorn Tears. You have the following information about the daily

demand for your business 

Qdtea = 50 − 5ptea + 4pcoffee + 6I − 3psugar

Where I is income. Suppose that the current equilibrium price and quantity are ptea*=3 and Qtea*=90. Which of the following statements regarding the price elasticity of demand at equilibrium is true?

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The demand (DD)... View the full answer

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