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The demand curve for a product sold by Big G is given by Qxd=1200-3Px-0.1Pz where Pz = $300.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 5E

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Question

Refer to attached, For the first time I two years, Big G raise the price of X by 4%. If, as a result of this price increase, the volume of all X sold by Big G dropped by 5%, what can you infer about the own price elasticity of demand for product X by Big G? Can you predict whether the revenues on sales of its brand increased or decreased?

The demand curve for a product sold by Big G is given by
Qxd=1200-3Px-0.1Pz where Pz = $300.

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