Serenity Spa Increased Its Total Monthly Revenue from $11,250 to $12,350

question 76

Multiple Choice

Serenity Spa increased its total monthly revenue from $11,250 to $12,350 when it raised the price of a massage from $75 to $95.What is the price elasticity of demand for Harry's Haircuts

• A)0.318
• B)0.416
• C)0.608
• D)0.816

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Definitions:

Perfectly Competitive

A market structure characterized by many buyers and sellers, homogeneous products, and the absence of barriers to entry, leading to optimal price and output levels.

Excessively High Profits

Profits that significantly exceed the normal expected return, often seen as unreasonable or indicative of limited competition.

Perfectly Competitive Market

A market structure characterized by many buyers and sellers, homogenous products, and free entry and exit, leading to price determination purely by demand and supply.

Soybeans

A type of legume native to East Asia, widely grown for its edible bean, which has numerous uses including oil, animal feed, and as a food item.