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Suppose that 500 units of a good are demanded at a price of $10 per unit. A reduction in price to $8 results in an

Suppose that 500 units of a good are demanded at a price of $10 per unit. A reduction in price to $8 results in an increase in quantity demanded to 700 units. Using the midpoint formula, calculate the price elasticity of demand? By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve?

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