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explain how an undersanding of elasticity can help business owners determine the most profitable prices to set for their products

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perfectly inelastic vs perfectly elactic products will not meet the content of both producer and consumer. It highly depends on the product. understanding the factors that vary elasticity will help owners decide on a price depending in external changes. eg. # of substitutes for product, # number of uses of product in daily life, how much % of income that purchase will take.
User Rickard Lindroth
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