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Buck's is a pet care company that recently increased the average price of its services by 4%. As a result, the number of customers dropped by 5%. Based on this information, what is the price elasticity of demand for services at Buck's? How will this 4% increase of the average price of services impact total revenue at Buck's?
Bufasthar, another pet care company in the area that competes with Buck's decided to decrease the average price of its services by 2%. How will this decision likely impact the demand for services at Buck's?
Assume that the average disposable income in the area in which it operates increases by 5% over the last year. As a result, the number of customers at Buck's increased by 4%. Based on this information, what is the income elasticity of demand for services at Buck's? Are pet care services at Buck's considered normal goods?
At a = 0.05, can it be concluded that there is a difference in the rates of both cities?
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