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Problem

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Textbook Expert
Textbook ExpertVerified Tutor
20 Nov 2021

Given information

1. During the summer months Terry makes and sells necklaces on the beach.

2. Last summer he sold the necklaces for  each and his sales averaged 20 per day.

3. When he increased the price by  , he found that the average decreased by two sales per day.

4. Demand function is linear. 

5. The material for each necklace costs Terry

Step-by-step explanation

Step 1.

Let the demand function be

in slope-intercept form.

Therefore we have the following sets of equations from the given information

 

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