Problem
The "Nikiforos" Range Corporation manufactures a line of microwave ovens costing $500 dollars each. Its sales have averaged about 6,000 units per month during the past year. On or about November 1, 2022, "Nikiforos" closest competitor, "Idomeneas,"Stove Works, cut its price for a closely competitive model from $600 to $450 dollars. "Nikiforos" noticed that its sales volume declined to 4500 units per month after "Idomeneas" announced its price cut.
• What is the Cross Price Elasticity of Demand between "Nikiforos" oven and the competitive "Idomeneas" firm? Would you say that these two firms are remarkably closecompetitors?