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The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special":

Qd = 1,200,000 - 40P

What is the point price elasticity of demand at prices of:
a. $8000
b. $10,000

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Solution Preview

The formula for calculating price elasticity is

elasticity = ...

Solution Summary

This solution contains step-by-step calculations to determine the point price elasticity demand at specific prices.