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Suppose the Price of Flour Increases from $0

Question 106

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Suppose the price of flour increases from $0.80 to $1.00 a pound and the quantity demanded decreases from 100 pounds to 95 pounds. Using the midpoint method, what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic?

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The price elasticity of demand is 0.23. ...

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