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TLC Lawn Care, Inc. provides fertilizer and weed control services to residential customers. Its seasonal services package, regularly priced at $250, includes several chemical spray treatments. As part of an effort to expand its customer base, TLC offered $50 off its regular price to customers in Lahania area. Customer response was enthusiastic, with sales rising to 5,750 units from the 3,250 units sold in the same period the previous month
1. Calculate price elasticity of demand for TLC service. p =?
2. Calculate the optimal price for TLC service if marginal cost is $135. P =?
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