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All questions utilize the multivariate demand function for Smooth Sailing sailboats in C6 on text page 83, initially with:
PX = $9500 PY = $10000 I = $15000 A = $170000 W = 160
This function is:
Qs = 89830 -40PS +20PX +15PY +2I +.001A +10W
1. Use the above to calculate the arc price elasticity of demand between PS = $9000 and PS = $8000. The arc elasticity formula is:
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