Calculations use conventional formula for percentage change

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Suppose the current price of oil is $120 per barrel. At its next meeting, OPEC decides to increase crude oil production by 10%. Assume that OPEC accounts for 40% of the world's supply of crude oil and no other nation changes its oil production during the time frame being considered. The price elasticity of demand for oil is estimated at 0.1. What will be the price of oil after the OPEC's action? (In your calculations use the conventional formula for percentage changes, rather than the midpoint formula.)

Reference no: EM13886614

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