Calculate the arc elasticity between a price of 9 and price

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The equation for a demand curve has been estimated to be Qd = 100 - 10P + 0.5Y, where Q is quantity, P is price and Y is income. Assume P = 9 and Y = 100.

1. At a price of 9, what is price elasticity and what does it mean in terms of the revenue of the company?

2. At an income level of 100, what is income elasticity and what does it mean?

3. Calculate the arc elasticity between a price of 9 and a price of 12.

Reference no: EM132492401

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