Ask Question
18 July, 08:32

Sony is considering a 10 percent price reduction on its HD TV sets. If the price-elasticity coefficient for the sets in this price range is 0.75, then the price cut will cause

+3
Answers (1)
  1. 18 July, 10:01
    0
    A 7.5% increase in the quantity demanded

    Explanation:

    If the price elasticity of demand (PED) is 0.75, that means that for every 1% change in the price of a product, the quantity demanded for the product will inversely change by 0.75%. If the price increases, the quantity demanded decreases, and vice versa.

    If Sony lowers the price of its TVs by 10%, and the PED = 0.75, then the quantity demanded will increase by = 10% x 0.75 = 7.5%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Sony is considering a 10 percent price reduction on its HD TV sets. If the price-elasticity coefficient for the sets in this price range is ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers