The manager of the grocery store accidentally mismarked a shipment of 2-kg bags of charcoal at RM4.38 instead of the regular price of RM5.18. 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.
i) What is the store's arc elasticity of demand for charcoal?
ii) Give an economic interpretation of the numerical value obtained in part (i).
b. The Malaysian Econometrics Society (MES) is introducing a brand new model called the "Kira Special." Using the latest forecasting techniques, MES economists have developed the following demand function for the "Kira Special":
QD = 1,200,000 - 40P
What is the point price elasticity of demand at prices of RM8,000?