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Suppose the price of apples rises from $3 a pound to $3.50 a

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Suppose the price of apples rises from $3 a pound to $3.50 and your consumption of apples drops from 35 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic? Be sure to show the work you used to support your answer.

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The solution provides detailed analysis, discussions and explanations for this economic problem.

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The formula for this calculation is explained in the provided reference:
Elasticity of demand = (Q2 - Q1)*(P2 + P1)/[(Q2 + Q1)*(P2 - P1)]

We have Q1 = 35, Q2= 20
P1 = 3, P2 = 3.5
Thus elasticity = (20-35)*(6.5)/[(20+35)*(3.5-3) = ...

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