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Ghose and Han (2014) found that the elasticity of demand for Google Play apps is 3.7. This elasticity applies to a small college town where approximately 1,000 apps per month are sold. If price rises by 3%, what would be the effect on revenue? A. The revenue will rise by 8.4%. B. The revenue will fall by 8.4%. C. The revenue will rise by 5.4%. D. The revenue will fall by 5.4%.

Ghose and Han (2014) found that the elasticity of demand for Google Play apps is 3.7. This elasticity applies to a small college town where approximately 1,000 apps per month are sold. If price rises by 3%, what would be the effect on revenue? A. The revenue will rise by 8.4%. B. The revenue will fall by 8.4%. C. The revenue will rise by 5.4%. D. The revenue will fall by 5.4%.

Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
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Ghose and Han (2014) found that the elasticity of demand for Google Play apps is 3.7. This elasticity applies to a small college town where approximately 1,000 apps per month are sold. If price rises by 3%, what would be the effect on revenue? A. The revenue will rise by 8.4%. B. The revenue will fall by 8.4%. C. The revenue will rise by 5.4%. D. The revenue will fall by 5.4%.
Transcribed Image Text:Ghose and Han (2014) found that the elasticity of demand for Google Play apps is 3.7. This elasticity applies to a small college town where approximately 1,000 apps per month are sold. If price rises by 3%, what would be the effect on revenue? A. The revenue will rise by 8.4%. B. The revenue will fall by 8.4%. C. The revenue will rise by 5.4%. D. The revenue will fall by 5.4%.
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