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Question: Boeing estimates the own-price elasticity of demand for new commercial jets is -1.25. Use their estimate to answer the following questions. a. Write down

Question: Boeing estimates the own-price elasticity of demand for new commercial jets is -1.25. Use their estimate to answer the following questions.

a. Write down the general formula to calculate the own-price elasticity of demand.

b. Is the demand of new Boeing commercial jets price elastic or price inelastic? Explain.

c. The objective of Boeing is to maximize its total revenue. Would you recommend them to cut 10 percent price of new commercial jets prices? Why or why not?

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