A local specialty wine store normally sells an average of 129 imported wines from France - per month - over 6 months at an average of $15.86 each. The price elasticity of Demand for these wines is estimated to be -1.64. Recent government regulations, Canadian Dollar value changes and transportation costs have increased costs considerably resulting in higher breakeven prices for all items. In order to capture economic profits the store manager decides to take some action and re-prices the inventory in the store. If the manager increases the price of French Wines by 10% how many bottles of French Wine will they sell? ** HINT - use the basic formula: Elasticity = (Unknown Q / Change in Price) x (Average Price / Average Quantity sold) ** enter your answer for HOW many bottles of French Wine will be sold FOLLOWED by whether the elasticity value is inelastic or elas
A local specialty wine store normally sells an average of 129 imported wines from France - per month - over 6 months at an average of $15.86 each. The
Recent government regulations, Canadian Dollar value changes and transportation costs have increased costs considerably resulting in higher breakeven prices for all items. In order to capture economic profits the store manager decides to take some action and re-prices the inventory in the store.
If the manager increases the price of French Wines by 10% how many bottles of French Wine will they sell?
** HINT - use the basic formula: Elasticity = (Unknown Q / Change in Price) x (Average Price / Average Quantity sold)
** enter your answer for HOW many bottles of French Wine will be sold FOLLOWED by whether the elasticity value is inelastic or elas
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