Essay
Andy has discovered a new way to make clothes pegs more cheaply than his competitors.He believes that since he can now sell his clothes pegs at a lower price than other clothes-peg providers on the market, he will be able to increase his revenue by attracting more customers.He estimates the price elasticity of demand for clothes pegs to be 0.7.What will happen to his total revenue if he decreases the price of his clothes pegs? What should Andy do?
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