Help with microeconmics problem please? (calculate, payment, sales, increase)
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The current price of yoyos is $1.20. If Ed=.30, how much will the price have to decrease in order to increase sales by 10%? What formula would I use to calculate this? Thanks in advance.
The current price of yoyos is $1.20. If Ed=.30, how much will the price have to decrease in order to increase sales by 10%? What formula would I use to calculate this? Thanks in advance.
Your price elasticity of demand should be negative.
Does this help?
-.30 = E = (∆Q/Q)/(∆P/P) = (∆Q/∆P)(P/Q) = (1.10)(1.20)/∆P
Solve for ∆P.
Good luck!
May I ask, what class this is for (HS, uni, etc) and where (US State, country)?
The current price of yoyos is $1.20. If Ed=.30, how much will the price have to decrease in order to increase sales by 10%? What formula would I use to calculate this? Thanks in advance.
I suspect it was a post that needed an immediate response, not one several days later. Just my guess
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