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    Economics of internet

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    A. What price-cost markup is implied by a firm' elasticity of demand equal to -3.0?

    B. A "loss leader" is often defined as a product which is sold below incremental cost in order to build traffic to a store (whether physical or online). How would you reconcile the use of loss leaders with the markup rule you used in part A.?

    C. How is the use of a loss leader like investing in reputation?

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