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Explain how elasticitys should be used in pricing decisions

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Dakota Publishers prints coffee table photo books of the mountain states and Great Plains.  The marketing manager normally prices books at $35 each, and sales an average of 4,000 per month.  Last month, she had a sale and priced volumes at $22.50 each, selling 8,500 copies.  Compute the price elasticity for these books.  Explain how elasticity’s should be used in pricing decisions.  If you were responsible for setting the price of these volumes, what would you choose and why? 

Reference no: EM13687638

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