Suppose a local bank increases the fees they charge for their bank accounts by 25 percent....

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Suppose a local bank increases the fees they charge for their bank accounts by 25 percent. In response, the demand for their

business economics

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Answer 1

Answer #1

The price elasticity of their demand using the mid point method is 0.4.

% change in demand = (10,000 -15,000) / ((10,000+15,000 ))/2

= 0.1 or 10%

so price elasticity will be 10/25 = 0.4.

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Answer 2

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