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Case Study - Economics Pricing Justin has been selling 4,600 T-shirts per month for $6.50. When...

Case Study - Economics

Pricing Justin has been selling 4,600 T-shirts per month for $6.50. When he increased the price to $7.50 he sold only 4,000 T-shirts.

a. What is the demand elasticity? If his marginal cost is $4 per shirt, what is his desired markup and what is his initial actual markup?

b. Was raising the price profitable?

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