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Calculating the number of popsicles sold in the given cases

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Address the following for the town of Rostin.

Price: $1
Sales per day: 100 popsicles
Short run price increase of $1 (to $2 total) = Es = 1.0 (unit-elastic)
Long rum price increase of $1 (to $2 total) = Es = 1.5

How many popsicles will be sold at the new price in the short term and long term? Apply the midpoints approach to the elasticity of supply.

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Solution Summary

Solution describes the steps to calculate the new sale levels following the changes in price with the help of midpoint formula of elasticity.

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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