Forecast sales given that the price is reduced


However, in checking with government economists, Hanna finds that per capita disposable income is expected to rise to $9,000 in 2011. In the past the company has observed an arc income elasticity of +1.5 for microwave ovens. Forecast 2011 sales given that the price is reduced to $225 and that per capita disposable income increases to $9,000. Assume that the price and income effects are independent and additive.

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Microeconomics: Forecast sales given that the price is reduced
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