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Practice Question 17: Chapter mankozt, Section .34, Problem 089 17. Chapter mank07t, Section .34, Problem 089 For a particula
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Answer #1

Solution:

Option D) The market for the good is broadly defined.

Explanation:

Narrowly markets tend to have more elastic demand than broadly defined markets because it is easier to find close substitutes for narrowly defined goods.

Here, the elasticity of demand is

=\frac{-12}{8}

= -1.5

This shows that demand is relatively elastic.

So, we can say that the market is broadly defined.

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