What is cross price easticity of demand, Managerial Economics

Assignment Help:

For some time, two firms have charged $0.90 per standard unit of crating materials for shipping a particular type of machine tool and each has been selling about 20,000 units per month. Last month, U-Pak-It reduced its price to $0.80 per unit and its volume increased to 25,000 units. During that month, Boxit (the other company) maintained its price at $0.90 but saw its volume decline to 17,000 units.

a. What is the price elasticity of demand facing U-Pak-It?

b. What is Boxit's cross-price elasticity of demand for U-Pak-It price changes?

c. If the price elasticity of demand for Boxit is the same as that for U-Pak-It, what price reduction for Boxit would be required to increase its monthly volume back to 20,000 units per month?


Related Discussions:- What is cross price easticity of demand

Basis of wage claims, The Basis of Wage Claims The union's demand for ...

The Basis of Wage Claims The union's demand for higher wages is normally based  on one or more of the following four arguments: 1. The cost of living argument This is

Increemental principle, asumption and limitation of increemrntal,oppurtunit...

asumption and limitation of increemrntal,oppurtunity cost

Explain cost output relationship, Explain cost output relationship with ref...

Explain cost output relationship with reference to: a.    Total fixed cost and output b.    Total variable cost  and output

Location problem in the plane, Location problem in the plane: In Kent, ...

Location problem in the plane: In Kent, the council to respond to the people and government needs, it decided to establish 3 community care homes. The towns are recorded with t

Cost of unemployment, Cost of Unemployment Unemployment is a problem b...

Cost of Unemployment Unemployment is a problem because it imposes costs on society and the individual.  The cost of unemployment to a nation can be categorized under three hea

Public Debt, what are the Sources of public debt

what are the Sources of public debt

Scarcity and oppurtunity cost, define scarcity and oppurtunity cost.show ho...

define scarcity and oppurtunity cost.show how these concepts are useful in managerial decision making

Isoquants, #question.meaning of isoquants and its types

#question.meaning of isoquants and its types

Functions of central bank , FUNCTIONS OF CENTRAL BANK Economists and f...

FUNCTIONS OF CENTRAL BANK Economists and financial experts lack in unanimity about the functions of a central bank. According to Kisch and Elkin, the essential function of a c

Types of public debt, Types of Public Debt Public debts can be classif...

Types of Public Debt Public debts can be classified according to the purpose for which the money was borrowed into; a.           Reproductive Debt:  where a loan has been

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd