Calculate the price elasticity of demand for a product

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Assume that you raise the price of a product you have in inventory from $600 to $1,000. After the price increase you notice that your sales of this product have gone from 300 per month to 100 per month.

1. Calculate the price elasticity of demand for this product (show your computations).
2. Is this product price elastic or inelastic?
3. Should you maintain the higher price of $1,000 or reduce it back to $600?

Reference no: EM13182645

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