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Calculation of price elasticity of demand

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Suppose you are a painter, and the price of a gallon of paint increased from $3.00 a gallon to $3.50 a gallon. Your usage of paint drop from 35 gallons to 20 gallons a month.

1. Compute the price elasticity for paint and show calculations. Decide whether the demand for paint is elastic, unitary elastic, or inelastic.

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Solution Summary

Price elasticity for paint is calculated and Decision regarding elasticity included in the Solution.