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Suppose that you are currently charging a price of $30. You know that at your current price, income elasticity is equal to 1.5 and price
Suppose that you are currently charging a price of $30. You know that at your current price, income elasticity is equal to 1.5 and price elasticity equals -2. If you see a 25% decrease in income, calculate the price change required to maintain your current sales level. Note: you must fully derive all the steps of your calculations including that%ChangeQ=ep*(%changeP)+ eI*(%changeI)
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