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Posted by on Sunday, August 15, 2010 at 11:01am.

Skateoards sell for $70. During the past year they sold 4,000 skateboards. The company beleives that the price elasticity for product is -2.5. If it decreases the price to $63, what would be the quantity sold?

  • Managerial Economics - , Sunday, August 15, 2010 at 12:51pm

    dQ/dP=-2.5


    where dQ= percent quantity demand
    dP= percent price change

    dQ=dP*-2.5= -7/70 * -2.5= 25

    Q= 4000(1.25)=5000

    check my thinking

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