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3)Currently, demand elasticity for the product you produce is ep -2 and you sell QI-10 at Pl-8. Your total cost is fixed at $4 per unit produced. A client would like to purchase 02-15 at a lower price (P2) Compute P2 and determine if it would be profitable to satisty your client. What range of prices would generate profit for you?
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Answer #1

Ceuapt usod Poiree 2. 2. 8 3 2

Profit=TR-TC should be Positive.

Formula for demand elasticity is given.

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