Overall revenues from both disposable-digital camera sales

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You are a manager in charge of monitoring cash flow at a company that makes photography equipment. Traditional photography equipment comprises 40 percent of your revenues, which grow about 2 percent annually. You recently received a preliminary report that suggests consumers take three times more digital photographs than photos with traditional film, and that the cross-price elasticity of demand between digital and disposable cameras is –0.3. In 2012, your company earned about $600 million from sales of digital cameras and about $400 million from sales of disposable cameras.

If the own price elasticity of demand for disposable cameras is –2, how will a 4 percent decrease in the price of disposable cameras affect your overall revenues from both disposable and digital camera sales?

Your overall revenues will change by $___________ million

Reference no: EM13851234

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