Assume that department store is selling the popular brand of dress shirt for $109 each. During first two weeks, store sold 100 shirts, and to boost sale and clear isles for new product, it declared sale "buy one get one free". This resulted in sale of 500 shirts in 1 week, and isles were cleared.
i) Determine price elasticity of demand.
ii) Interpret the result. Specifically, what kind of demand elasticity is it and what co-efficient of elasticity indicates when price went down?