Question
I have a friend in New Hampshire that owns a lawn and garden store. Let's call him Donny. Donny told me he has been selling
I have a friend in New Hampshire that owns a lawn and garden store. Let's call him Donny. Donny told me he has been selling fertilizer for $30 per bag. Due to rising costs, he recently raised his price to $35 per bag. He is concerned because he has seen a 15% drop in demand since he raised the price.
What is the price elasticity of these bags of fertilizer? Is demand elastic or inelastic? Should Donny be worried?
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Microeconomics Theory and Applications
Authors: Edgar K. Browning, Mark A. Zupan
12th edition
9781118920060, 1118758870, 1118920066, 978-1118758878
