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Measuring Point Elasticity on a Linear Demand Curve
To explain the measurement of point elasticity of a linear demand curve, let's suppose that a linear demand curve is given by MN in Figure below and that we want to measure elasticity at point P.
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The acme paper company lowers its price of envelopes (1000 count) from $6to $5.40.
What limitations are inherent in the economist’s view of pricing?
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