The Manager of the Sell-Rite Drug Store Accidentally Mismarked a Shipment

question 10

Essay

The manager of the Sell-Rite drug store accidentally mismarked a shipment of 20-pound bags of charcoal at $4.38 instead of the regular price of $5.18.At the end of a week,the store's inventory of 200 bags of charcoal was completely sold out.The store normally sells an average of 150 bags per week. (a) What is the store's arc elasticity of demand for charcoal?
(b) Give an economic interpretation of the numerical value obtained in part (a)

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Definitions:

Ugandan

Relating to Uganda or its people, culture, and geography.

Coffee

A drink produced from brewing the roasted seeds of the Coffea plant's berries, known as coffee beans.

Consumer Surplus

The difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually pay.

Trade

The exchange of goods, services, or both between two or more parties, either within a country or across international borders.