Question: You are the manager of a firm that receives revenues
You are the manager of a firm that receives revenues of $ 40,000 per year from product X and $ 90,000 per year from product Y. The own price elasticity of demand for product X is 1.5, and the cross- price elasticity of demand between product Y and X is 1.8. How much will your firm’s total revenues (revenues from both products) change if you increase the price of good X by 2 percent?
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