The current price floor in the agricultural lettuce market

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The current price floor in the agricultural lettuce market is $1 per head. The price floor makes it such that the price of lettuce is 25% higher than equilibrium price and 100 heads of lettuce are demanded at the price of $1. Assuming that the elasticity of demand for lettuce is -0.50, what would be the equilibrium price and quantity of lettuce if the government removed the current price floor?

Reference no: EM13998707

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