Suppose we estimate that the demand elasticity for fine leather jackets is .7 at their current prices. Then we know that: Answer a 1% increase in price reduces quantity sold by .7%. no one wants to buy leather jackets. demand for leather jackets is elastic. a cut in the prices will increase total revenue. leather jackets are luxury itemsSource: http://www.homeworkminutes.com/question/view/47619/ECO-550ECO-550-Midterm
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