The Saad Enterprises manufactures cameras, Speakers and sells on average 21300 units monthly at $ 177 each to retail stores. Its closest competitor produces a similar type of Camera that sells for $198. If the demand for Saad’s product has an elasticity coefficient of −3.7, how many will it sell per month if the price is lowered to $156? 2. The competitor decreases its price to $170. If cross-price elasticity between the two speakers is 0.4, what will Saad’s monthly sales be?

Price elasticity of demand = Percentage change in quantity demanded / Percentage change in price

Answered: The Saad Enterprises manufactures…

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 1E: The Potomac Range Corporation manufactures a line of microwave ovens costing $500 each. Its sales...

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The Saad Enterprises manufactures cameras, Speakers and sells on average 21300 units monthly at $ 177 each to retail stores. Its closest competitor produces a similar type of Camera that sells for $198.

If the demand for Saad’s product has an elasticity coefficient of −3.7, how many will it sell per month if the price is lowered to $156?

2. The competitor decreases its price to $170. If cross-price elasticity between the two speakers is 0.4, what will Saad’s monthly sales be?

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