A product's point price elasticity has been estimated at -1.5. At the initial price of $20, the quantity demanded was 10 units. If the firm cuts the price to $17.50, quantity demanded and sold is expected to increase by _____.
A) 18.75%
B) 6.67%
C) 8.75%
D) 10.33%
E) 12.5%
Correct Answer:
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