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The Elasticity of Demand for Sunscreen Is 0

Question 38

Essay

The elasticity of demand for sunscreen is 0.8 and the elasticity of supply is 2.2. Suppose that the demand for sunscreen increased by 10% during an unseasonably hot month. Calculate the percentage change in the equilibrium price of sunscreen.

Correct Answer:

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Applying the formula:
Percentage change ...

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