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You just opened a flower shop and are trying to understand pricing issues. You were told that elasticities are very vital in determining prices and what products to provide, so you decide to investigate this concept.
You call your friend, an economics professor, and ask, "What is the price elasticity of demand? What determines it? What is elastic and inelastic demand?"
To really appreciate it, compute the following price elasticity's of demand:
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e) Formulate a spreadsheet model for performing a simulation of the daily sales. Perform 300 replications and obtain the average of the sales over the 300 simulated days
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