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The management of Iron Mills have estimated the following elasticity’s for its product as ?Qx,Px= 2; ?Q,I=1; and ?Qx,Py= 1.5 Where x refers to iron, I to income, and y to steel.
Next year the firm would like to increase the price of iron by 6 percent. Management forecasts that next year income will rise by 4 percent and that the price of steel will decline by 2 percent. If the company’s sales of iron this year are 1,200,000 kilograms, how many kilograms of iron can the firm expect to sell next year?
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Stan Money maker needs 15 gallons of gasoline to top off his automobiles’ gas tank. If he drives an extra eight miles (round trip) to a gas station on the outskirts of town, Stan can save $0.10 per gallon on the price of gasoline.
Which of the following statements best describes the retail market for electricity - Estimate the (own) price elasticity (of demand).
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