The ACME Corporation determines that at current prices the demand for its computer chips has a price elasticity of 2 in the short run, while the price elasticity for its disk drives is 1 a) If the corporation decides to raise the price of both products by 10 , what will happen to its sales To its sales revenue b) Can you tell from the available information which product will generate the most revenue If yes, why If not, what additional information do you need

Question: The ACME Corporation determines that at current prices the demand for its computer chips has a price elasticity of -2 in the short run, while

The ACME determines that at current prices the demand for its computer chips has a price elasticity of -2 in the short run, while the price elasticity for its disk drives is -1.
a) If the decides to raise the price of both products by 10%, what will happen to its sales? To its sales revenue?
b) Can you tell from the available information which product will generate the most revenue? If yes, why If not, what additional information do you need?

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