1. Suppose you are the economic adviser ofa company producing three brands of mobile pnones; Nokia 10, Samsung X and iPhone 7. Suppose further that, your company currently sells 120 units of iPhone Z at e800 per unit, 150 units of Samsung X at e800 per unit and 200 units of Nokia 10 at e100 per unit, but in a bid to maximize profit, the company's managing director proposes an increase in price of Samsung X from e800 to e1000 per unit for which quantity demanded is anticipated to fall from 150 to 100 units; iPhone Z from e800 to e 1200 per unit for which quantity demanded is anticipated to fall from 120 to 100 units; and Nokia 10 from 100 to 200 per unit for which quantity demanded is expected to fall from 200 to 100 units Using the mid-polint formula. compute the price elasticity of demand for each brand. From your answer in i, what is the type and economic interpretatiom of each brand's ii. value of elasticity.

1. Suppose you are the economic adviser ofa company producing three brands of mobile pnones; Nokia 10, Samsung X and iPhone 7. Suppose further that, your company currently sells 120 units of iPhone Z at e800 per unit, 150 units of Samsung X at e800 per unit and 200 units of Nokia 10 at e100 per unit, but in a bid to maximize profit, the company's managing director proposes an increase in price of Samsung X from e800 to e1000 per unit for which quantity demanded is anticipated to fall from 150 to 100 units; iPhone Z from e800 to e 1200 per unit for which quantity demanded is anticipated to fall from 120 to 100 units; and Nokia 10 from 100 to 200 per unit for which quantity demanded is expected to fall from 200 to 100 units Using the mid-polint formula. compute the price elasticity of demand for each brand. From your answer in i, what is the type and economic interpretatiom of each brand's ii. value of elasticity.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.13P

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