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Compute the implied arc price elasticity of demand

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Calculating arc price elasticity of demand

Arc Price Elasticity. Assume that amazon.com cut the price on a 1.10 ct Princess Cut Diamond Solitaire engagement ring from $4,500 to $2,500, and sales rose from 50 to 75 units per week.

A. Calculate the implied arc price elasticity of demand.

B. Is a further price decrease warranted? Why or why not?

 

Reference no: EM1327498

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