MANAGERIAL ECON.+BUS.STRATEGY (LOOSE)
MANAGERIAL ECON.+BUS.STRATEGY (LOOSE)
9th Edition
ISBN: 9781259896422
Author: Baye
Publisher: MCG
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Chapter 3, Problem 13PAA

For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 4 percent. If, as a result of this price increase, the volume of all cereal sold by Big G dropped by 5 percent, what can you infer about the own price elasticity of demand for Big G cereal? Can you predict whether revenues on sales of its Lucky Charms brand increased or decreased? Explain.

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