Suppose we estimate the cross-price elasticity of two goods for a small town to be -.75. In this town, 2000 units of good A are sold. If the price of Good B goes up by 8%, we can expect to sell __ many units of Good A (you may assume these goods are sold nation-wide, so the town is a price taker in the national market of these goods).
Suppose we estimate the cross-price elasticity of two goods for a small town to be -.75. In this town, 2000 units of good A are sold. If the price of Good B goes up by 8%, we can expect to sell __ many units of Good A (you may assume these goods are sold nation-wide, so the town is a price taker in the national market of these goods).
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter6: Simple Pricing
Section: Chapter Questions
Problem 5MC
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