How to interpret the stated elasticity for athletic shoes

Assignment Help Business Economics

Reference no: EM13744012

Historical data suggests that in the athletic shoe industry, the price elasticity for shoes is approximately -0.67.

1) Explain what price elasticity is, and how to interpret the stated elasticity for athletic shoes of -0.67.

2) Using the price of $100 and the quantity of 100,000 pairs, and the elasticity of -0.67, estimate the expected total unit sales if the shoes were offered at $125 per pair (show your work).

3) Estimate the price elasticity of this particular pair of shoes if the new price ($125 per pair) results in total sales of 95,000 pairs (show your work).

4) What effect would you expect the recent economic downturn to have on consumer price elasticity in general?

Reference no: EM13744012

Questions Cloud

Write the complete name : Write the complete name (prefix + unit) for each of the following numerical values:Part A 1×10-12g Spell out the complete name (prefix + unit).1×10-12g =1

Which solution has the lowest ph : Which solution has the lowest pH?1. 0.10 M HOBr2. 0.10 M HOCl + 0.10 M NaOCl

Price elasticity of clothing and income elasticity : According to a study, the price elasticity of clothing in the United States is 0.6, and the income elasticity is 1.4. Would you suggest that the ABC clothing company cut its price to increase its revenue?

Describe three-dimensional business-definition model : Describe Abell's three-dimensional business-definition model and explain where it can be utilized. Then, consider Reader's Digest Association, publisher of Reader's Digest, the largest circulation magazine in the world in 1992.

How to interpret the stated elasticity for athletic shoes : Historical data suggests that in the athletic shoe industry, the price elasticity for shoes is approximately -0.67. Explain what price elasticity is, and how to interpret the stated elasticity for athletic shoes of -0.67. Using the price of $100 and ..

The price elasticity of supply at market equuilibrium values : What are the equilibrium price and quantity in this market? At the market equilibrium, what is the price elasticity of demand and the income elasticity of demand?

Assignment on individual reflection and smart objectives : During and the first part of exchange ideas with your partner/s to test ideas regarding SMART objectives. Use Exhibit 1 on page 170 of the textbook as a starting point.

Suppose that a firms production function : Suppose that a firm’s production function is given by Q = KL + K. At point A, the firm uses K= 3 units of capital and L = 5 units of labor. At point B, along the same isoquant, the firm would only use 1 unit of capital.

What is equilibrium price and quantity of apartment rentals : Suppose the demand for apartment rentals in New York is Q = 1000 - P and the supply of apartment rentals is Q = 4P. What is the equilibrium price and quantity of apartment rentals in New York?

User Account

All Pages