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Arc elasticity of demand

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ABC, Inc sells it toys for $15 with a sales volume of 30,000 units per quarter. Assume the price elasticity coefficient is -0.5 and ABC, Inc raises the price to $16 in anticipation of the Christmas season. Estimated 4th quarter sales volume will be?

Use Are formula elasticity of demand.

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Solution Summary

The Arc formula elasticity of demand is applied.

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