f. Calculate the revenue before the price drop. Calculate the revenue after the price drop Is the price drop a good marketing strategy, holding all else constant?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Please answer subparts d, e, f & don't give handwritten answer thanku

C.
by the ob
Ho nolassy
dows pho
f.
pie?
If the price before the promotion was $6 per pie, what is the new price per
pla
Calculate the revenue before the price drop.
Calculate the revenue after the price drop
Is the price drop a good marketing strategy, holding all else constant?
Transcribed Image Text:C. by the ob Ho nolassy dows pho f. pie? If the price before the promotion was $6 per pie, what is the new price per pla Calculate the revenue before the price drop. Calculate the revenue after the price drop Is the price drop a good marketing strategy, holding all else constant?
Kroger store decides to run a price promotion for apple pies. Through market
research, they estimate an elasticity of demand for apple pies to be -1.8. During the price
promotion, they lower the price of pies by 25%. Before the price drop, they sold 135,000
pies.
a.
C.
above.
Are apple pies an inelastic good or elastic good? Interpret the OPE given
kadas
Given the promotion price change, what would the expected percentage
change in quantity be?
pie?
If the price before the promotion was $6 per pie, what is the new price per
Transcribed Image Text:Kroger store decides to run a price promotion for apple pies. Through market research, they estimate an elasticity of demand for apple pies to be -1.8. During the price promotion, they lower the price of pies by 25%. Before the price drop, they sold 135,000 pies. a. C. above. Are apple pies an inelastic good or elastic good? Interpret the OPE given kadas Given the promotion price change, what would the expected percentage change in quantity be? pie? If the price before the promotion was $6 per pie, what is the new price per
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