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What is the price elasticity of demand?

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The price of a firm's product increases from $5 to $6. As a result, the quantity demanded of the product declines from 600,000 to 500,000. The price elasticity of demand for the good is equal to (Use the arc price elasticity of demand).

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Mathematical calculation of the price elasticity of demand is provided in the solution.

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The arc price elasticity of demand is the calculated using the percentage change is calculated relative to the midpoint. Thus for ...

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