Answer:
Jack will sell 30% more pumpkins
Explanation:
Given
Selling Price of Pumpkin = $10
Price Reduction = 20%
Price Elasticity for pumpkins = 1.5
Calculating the new price.
New Price = Old Price - Old Price * Percentage Reduction
New Price = $10 - $10 * 20%
New Price = $10 - $10 * 0.2
New Price = $10 - $2
New Price = $8
Calculating the boost in sales of pumpkins
New Sales = Price Elasticity * Percentage Reduction
New Sales = 1.5 * 20%
New Sales = (1.5 * 20)%
New Sales = 30%
Hence, Jack will sell 30% more pumpkins
