KSU Products has just carried out a survey of the demand for their guidebooks to spoken Arabic. They have found the following results over the last six months. Sales revenue 356 398 372 360 365 350 Price ($) 4.5 4.0 4.2 4.5 4.3 4.8 a. Estimate an appropriate demand relationship; Q=aPb . b. Make a forecast of sales revenue for a price of $5, stating any assumptions. c. Estimate the price elasticity of demand for the data as a whole. d. If price is raised 10 per cent in general terms, what will happen to revenue?
KSU Products has just carried out a survey of the demand for their guidebooks to spoken Arabic. They have found the following results over the last six months. Sales revenue 356 398 372 360 365 350 Price ($) 4.5 4.0 4.2 4.5 4.3 4.8 a. Estimate an appropriate demand relationship; Q=aPb . b. Make a forecast of sales revenue for a price of $5, stating any assumptions. c. Estimate the price elasticity of demand for the data as a whole. d. If price is raised 10 per cent in general terms, what will happen to revenue?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
KSU Products has just carried out a survey of the demand for
their guidebooks to spoken Arabic. They have found the
following results over the last six months.
Sales revenue 356 398 372 360 365 350
a. Estimate an appropriate demand relationship; Q=aPb
.
b. Make a
any assumptions.
c. Estimate the price elasticity of demand for the data as a whole.
d. If price is raised 10 per cent in general terms, what will
happen to revenue?
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