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28 Sep 2019
The daily demand for Adidas Running Shoes is estimated as follows:
Suppose Adidas sells for $25 a pair, Y sells for $35, the company utilizes 50 units of advertising and average consumer income is $20,000. Using this information, answer the following questions:
a) Calculate and interpret the own price, cross-price and income elasticities
b) For raising revenues, should this firm raise or lower the price? Why? Explain?
c) Is the good Y a substitute or complementary good? Why? Explain
d) Is Adidas a normal or an inferior good? Why? Explain
The daily demand for Adidas Running Shoes is estimated as follows:
Suppose Adidas sells for $25 a pair, Y sells for $35, the company utilizes 50 units of advertising and average consumer income is $20,000. Using this information, answer the following questions:
a) Calculate and interpret the own price, cross-price and income elasticities
b) For raising revenues, should this firm raise or lower the price? Why? Explain?
c) Is the good Y a substitute or complementary good? Why? Explain
d) Is Adidas a normal or an inferior good? Why? Explain
Kritika KrishnakumarLv10
28 Sep 2019
