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The demand schedule for the product 'xyz' is given below:
Price($) Quantity demanded3 204 155 116 97 7
Task: Based on the above data, solve the questions given below:
Compute the point price elasticity of demand for an increase in the price from $5 to $6.
Compute the point price elasticity of demand for a decrease in the price from $6 to $5.
Why does the magnitude of price elasticity differ in a and b above, although the same set of price-quantity combinations are used to compute the price elasticity of demand? Is their an alternative method that can be used?
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