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Two friends who are addicted to Starbuck’s iced coffee were overheard talking. John said “No matter what the price of iced coffee is or will be, I will buy 4 cups a day.” His friend, Peter said “if Starbucks raises the price of a tall iced coffee above the current $1.95, I will not buy any coffee.”
What is the price elasticity of demand for iced coffee for John and for Peter?
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