Ghose and Han (2014) found that the elasticity of demand for Google Play apps is 3.7. (See
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Ghose and Han (2014) found that the elasticity of demand for Google Play apps is −3.7. (See the Mini-Case: Demand Elasticities for Google Play and Apple Apps.) This elasticity applies to a small college town where approximately 1,000 apps per month are sold. If price rises by 5%, what would be the effect on quantity demanded? Would revenue rise or fall? What is the percentage change in revenue (= price × quantity)?
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Managerial Economics and Strategy
ISBN: 978-0134167879
2nd edition
Authors: Jeffrey M. Perloff, James A. Brander
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