When the company decides to change price of a product it

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When a company decides to change the price of a product, it knows the demand for that product will change as a result. Elasticity measures this change in demand as a result in the change in price.

In an effort to increase revenue for the insurance industry, all insurance companies increased prices by 20 percent. To its dismay, only a 10% increase in revenue was received instead of the 20% increase that was expected.

Prepare a 1-2page essay that addresses the following questions:

What does this say about the elasticity demand for insurance products?
What were the insurance companies assuming the elasticity demand would be?
must be in APA format with APA references

Reference no: EM13387360

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