Apple and Samsung are two competing brands in smartphone device market Suppose that when the price of Apple is S1000 the quantity demanded is 28,000 units per month. When its price increases to $1200 monthly quantity demanded decreases to 24,000 units per month. Although there is no change in Samsung device prices, due to the change in Apple prices, demand for Samsung devices changes from 12,000 units per month to 16 000 units to per month. a. Calculate the price elasticity of demand for Apple devices by us ng the mid pont metnod (6 point) b Calculate the cross price elasticity of demand tor Apple and Samsur devices and decide what type of relationship is there between two brands (5 points).

Apple and Samsung are two competing brands in smartphone device market Suppose that when the price of Apple is S1000 the quantity demanded is 28,000 units per month. When its price increases to $1200 monthly quantity demanded decreases to 24,000 units per month. Although there is no change in Samsung device prices, due to the change in Apple prices, demand for Samsung devices changes from 12,000 units per month to 16 000 units to per month. a. Calculate the price elasticity of demand for Apple devices by us ng the mid pont metnod (6 point) b Calculate the cross price elasticity of demand tor Apple and Samsur devices and decide what type of relationship is there between two brands (5 points).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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