You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gumi flopsicles, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know th complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of guppy gummies decreases by 4%, the quantity of flo sold increases by 5% and the quantity of kipples sold decreases by 5%. Your job is to use the cross-price elasticity between guppy gummies other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the cross-price elasticity between guppy gummies and flopsicles, and then betw guppy gummies and kipples. In the second column, determine if guppy gummies are a complement to or a substitute for each of the goods li Finally, complete the final column by indicating which good you should recommend marketing with guppy gummies. Relative to Guppy Gummies oss-Price Elasticity of mand Complement or Subst Recommend Marketing with Guppy Gummies Flopsicles Kipples
You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gumi flopsicles, and kipples. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know th complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of guppy gummies decreases by 4%, the quantity of flo sold increases by 5% and the quantity of kipples sold decreases by 5%. Your job is to use the cross-price elasticity between guppy gummies other goods to determine which goods your marketing firm should advertise together. Complete the first column of the following table by computing the cross-price elasticity between guppy gummies and flopsicles, and then betw guppy gummies and kipples. In the second column, determine if guppy gummies are a complement to or a substitute for each of the goods li Finally, complete the final column by indicating which good you should recommend marketing with guppy gummies. Relative to Guppy Gummies oss-Price Elasticity of mand Complement or Subst Recommend Marketing with Guppy Gummies Flopsicles Kipples
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
Chapter13: best-practice Tactics: Game Theory
Section: Chapter Questions
Problem 6E
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