The Efficient Software Store had been selling a spreadsheet program at a rate of 100 per month
Question:
The Efficient Software Store had been selling a spreadsheet program at a rate of 100 per month and a graphics program at the rate of 50 per month. In September 2012, Efficient's supplier lowered the price for the spreadsheet program, and Efficient passed on the- savings to customers by lowering its retail price from $400 to $350. The store manager then noticed that not only had sales ol the spreadsheet program risen to 120, but also the sales of the graphics program increased to 56 per month. Explain what has happened. Use both arc price elasticity and arc cross-elasticity measures in your answer.
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Arc price elasticity for spreadsheet program 120 100 350 400 ...View the full answer
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