Determine the optimum price of powerade in australia

Reference no: EM133711312

Question: Powerade is a soft drink targeted to the athletes. It is lost in 375 ml cans, exclusively in Australia. It was noted that in 2019, sales of this drink were 22 million cans. The price of one can of Powerade is $1. In 2020, the price of Powerade increased to $1.20. As a result, sales dropped to 14 million. Based on the experience of other similar drinks, it is believed that demand elasticity is constant. The cost of a can of Powerade (including distribution etc.) is given by $0.20. Determine the demand elasticity of Powerade in Australia. Determine the optimum price of Powerade in Australia. Suppose the demographic changes increase the number of potential consumers in Australia by 12%. That means, for each price, the quantity demanded is 12% higher than before. How does this affect the optimum price determined above?

Reference no: EM133711312

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