The Canadian metal chair manufacturing market has (n=78) firms. The estimated 8.1 elasticity of supply is (eta_{0}=3.1),

Question:

The Canadian metal chair manufacturing market has $n=78$ firms. The estimated 8.1 elasticity of supply is $\eta_{0}=3.1$, and the estimated elasticity of demand is $=-1.1$. Assuming that the firms are identical, calculate the elasticity of demand facing a single firm. Is its residual demand curve highly elastic?

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