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

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.

Step by Step Solution

★★★★★

3.44 Rating (170 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Arc price elasticity for spreadsheet program 120 100 350 400 ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

935-B-E-M-E (6441).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

At many college athletic events, you can nd plastic drink cups with the school logo printed on it. Twenty years ago, these cups came molded in a variety of colors. Now nearly all the cups are white...

Use the following information to answer the questions below: Manufacturing: Sales revenue = PM QM = 150 Payments to labor = W LM = 100 Payments to capital = RK K = 50 Agriculture: Sales revenue =...

At the beginning of the last quarter of 2011, Youngston, Inc., a consumer products firm, hired Maria Carrillo to take over one of its divisions. The division manufactured small home appliances and...

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, Efficients supplier lowered the...

Pls answer all 4 of them and make the answer easy and clear to understand thank u 10. . The Teenager Company makes and sells skateboards at an average price of $70 each. Dur- ing the past year, they...

Super Software is a retail outlet and sells a data analysis program at a rate of 1 0 0 per month and a graphics add on at the rate of 5 0 per month. In September, Super Software's supplier lowered...

screenshot Tops, Inc. The Business Situation After graduating with a degree in business from Rural College in Campus Town, USA, Michael Woods realized that he wanted to remain in Campus Town and...

please show work Case 6 Sweats Galore, Inc. Developed by Jessica Johnson Frazier, Eastern Kentucky Universiry and Patricia H. Mounce, University of Central Arkansas The Business Situation After...

Intro to Personal Wealth Management (Scott Keffer) 1) Using the asset and liability information from the base case, develop a balance sheet for Scott Keffer. Assume he has no unpaid bills besides...

Submission information: Your assignment submission must include both an Excel spreadsheet (electronically submitted) using the template provided and a printed report of your Excel spreadsheet. The...

For this problem assume the following: (1) the risk-free rate of return = 0.5% (2) the required return on the market as a whole = 10.0% (3) the Beta of the Tom Company = 1.0 (4)Tom just paid a...

The following output is associated with a multiple regression model with three independent variables: a. What is the regression model associated with these data? b. Is the model statistically...

The following errors took place in journalizing and posting transactions: a . Cesh of $ 4 , 0 7 0 recelved on account was recorded as a debit to Fees tamed and a crest to Curh. b . A $ 1 , 1 8 0...

Discuss the following statement: Adam Smith appeals to many contemporary economists precisely because they, like Smith, have a conception of human nature that is entirely too narrow.

For each of the following scenarios, determine whether the decision maker is risk neutral, risk averse, or risk loving. a. A manager prefers a 10 percent chance of receiving $1,000 and a 90 percent...

Your store sells an item desired by a consumer. The consumer is using an optimal search strategy; the accompanying graph shows the consumer??s expected benefits and costs of searching for a lower...

You are the manager of a firm that sells a commodity in a market that resembles perfect competition, and your cost function is C(Q) = Q + 2Q2. Unfortunately, due to production lags, you must make...

company has an 11% WACC and is considering twa mutually exclusive investments (that cannot be repeated) with the following cash flows: a. What is each project's NPy? Negative values, if any, should...

You may need to use the appropriate appendix table to answer this question. Consider the following hypotheses and statistics. Ho : p = 60 . H1 : / > 60 . g = 20, n = 100, x = 68, a = 0.01 Calculate...

How would you apply the quick sort algorithm you learned in class to sort the sequence 8 , 6 , 9 , 6 , 1 0 , 1 4 , 7 , 1 1 ? Use the in - place version as depicted in the slides, with the pivot being...