The Following Information Pertains to Three Different Products Being Sold

The following information pertains to three different products being sold by Leone Company:
$\begin{array}{rrrrr}\underline{\text { Product }}&\underline{\text { Old Price }}&\underline{\text { New Price }} & \underline{\text { Old Quantity }} &\underline{ \text { New Quantity }}\\\mathrm{X} & \$ 15.00 & \$ 14.25 & 2,000 & 2,200 \\\mathrm{Y} & 20.00 & 18.50 & 3,000 & 3,300 \\\mathrm{Z} & 25.00 & 27.50 & 4.000 & 3.600\end{array}$
a.Determine the price elasticity of demand for each of the products.
b.Which products have an elastic demand? Inelastic demand?

Correct Answer:

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a.X: [(2,200 - 2,000)/2,000]/[($15.00 - ...

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