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4 October, 19:38

Suppose that legalizing the use of marijuana would decrease its price by 81 percent. If the price elasticity of demand for marijuana is -2.75 , what would be the percentage increase in the quantity of marijuana demanded from legalizing marijuana ? nothing percent. (Enter a numeric response using a real number rounded to two decimal places.)

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  1. 4 October, 19:48
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    222.75%

    Step-by-step explanation:

    Elasticity of demand for marijuana

    (dQ/Q) / (dP/P) = - 2.75

    If the price drops 81%, that is dP/P=-0.81

    If we re-arrange the equation

    dQ/Q = - 2.75 * dP/P = - 2.75 * (-0.81) = 2.2275

    The demand will be 222.75% higher if the prices drop by 81%
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