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Economics 103 ETSU Economics Questions

pleas answer all questions carefully.

1) Is the following statement true or false? Explain.

The own price elasticity is constant for linear demand.

2) Suppose you are a consultant for a Detroit Ford dealer. Let the market price be at $25,000 for a Ford Taurus. If the dealer has a stock of unsold 2020 Ford Taurus, and you know that the elasticity of demand for this dealer’s cars is –1.5, would you recommend any change in price? Why?

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