Will revenues increase or decrease in the short and long run

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Waterson Power Corporation's regulator has just allowed a rate increase from 9 to 11 cents per kilowatt hour of electricity. The short-run demand elasticity is -0.6 and the long-run demand elasticity is -1.2.

(a) What will be the percentage reduction in power demanded in the short run?

(b) What will be the percentage reduction in power demanded in the long run?

Reference no: EM131072562

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