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    Elasticity of demand: making cookies

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    Income increase from 13000 to 17000. Cookies demand increased by 15% and the demand for peanut butter chips decreased by 10%. I have to calculate the income demand for the cookies and the peanut butter chips.

    How do I begin to solve this problem?

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    The elasticity of something is a ratio of percentages - i.e. if I change something by X% then how much ...

    Solution Summary

    This solution discusses elasticity of demand.