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Solution: You are the owner of a high-end boutique in Toronto. You have estimated that the marginal revenue of spending an additional $40,000 on advertising

Question: You are the owner of a high-end boutique in Toronto. You have estimated that the marginal revenue of spending an additional $40,000 on advertising in the local radio station would be $60,000. However as a result of your research you are a little apprehensive. You have estimated that the price elasticity is – 1.8. Should you go ahead with the promotion?

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Solution: You are the owner of a high-end boutique in Toronto. You have estimated that the marginal revenue of spending an additional $40,000 on advertising

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