Calculate the change in revenue as result of the price cut

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Reference no: EM131433115

Ali's Gyros operates near a college campus. Ali has been selling 120 gyros a day at $4.50 each and is considering a price cut. He estimates that he would be able to sell 200 gyros per day at $3.50 each.

a. Calculate the pric e elasticity of demand using the midpoint formula.

b. Calculate the change in revenue as a result of the price cut.

Reference no: EM131433115

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