Alexandra Wexler reports on the Florida OJ market (WSJ article (2014): " retail demand for the beverage continues to slide. U.S. consumers bought 37.05 million gallons of orange juice in the four weeks ended Oct. 25, down 9.4% from a similar period a year earlier, according to Nielsen data published by the Florida Department of Citrus this month. Average prices for the beverage rose 4.8% over the same period to $6.46 a gallon, while total revenue fell 5.1% to $239.24 million, the data showed." Assuming other things constant, compute the price elasticity of demand for Orange Juice. Use the computed price elasticity of demand to explain why revenue decreased?

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To compute the price elasticity of demand for orange juice we can use the formula Price Elasticity o... View the full answer