he price elasticity of demand for soft drinks is -1.6. SK Jaleel sells 500,000 cases of 250ml soft drink at a price of $60 per case. Sollo sells 380,000 cases at the same price point, but decides to implement a 5% price cut to increase their sales. The impact is felt by SK Jaleel as their product demand drops by 20%. What price adjustment is necessary by SK Jaleel in order to have a production level of 450,000 cases? a.Drop price by $5.68 per case b.Drop price by $2.95 per case c.Drop price by $3.34 per case d.Drop price by $3.87 per case
he price elasticity of demand for soft drinks is -1.6. SK Jaleel sells 500,000 cases of 250ml soft drink at a price of $60 per case. Sollo sells 380,000 cases at the same price point, but decides to implement a 5% price cut to increase their sales. The impact is felt by SK Jaleel as their product demand drops by 20%. What price adjustment is necessary by SK Jaleel in order to have a production level of 450,000 cases? a.Drop price by $5.68 per case b.Drop price by $2.95 per case c.Drop price by $3.34 per case d.Drop price by $3.87 per case
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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| The |
| SK Jaleel sells 500,000 cases of 250ml soft drink at a price of $60 per case. Sollo sells 380,000 cases at the same price point, but decides to implement a 5% price cut to increase their sales. |
| The impact is felt by SK Jaleel as their product demand drops by 20%. |
| What price adjustment is necessary by SK Jaleel in order to have a production level of 450,000 cases? |
a.Drop price by $5.68 per case
b.Drop price by $2.95 per case
c.Drop price by $3.34 per case
d.Drop price by $3.87 per case
e.Drop price by $4.26 per case
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