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    Point price elasticity of demand, Optimal price

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    Optimal Price. Last month, Rick's Bike Shop, Inc. increased the price on the 24 ounce can of bearing grease by 1%. In response, sales dropped by 4%.

    A. Calculate the point price elasticity of demand for bearing grease.
    B. Calculate the optimal price for bearing grease if marginal cost is $4.50 per unit.

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    Solution Summary

    This solution helps calculate the point price elasticity of demand and optimal price for bearing grease.