In December 2020Runners' Worldreported that the prices of Nike running shoes had risen by 5 percent and total revenue had risen by four percent over the past year.Meanwhile, the quantity of Brooks running shoes fell by 1 percent as the price of Brooks running shoes rose by 3 percent.

a. Assume for the moment that the change in price of Nike running shoes was the only change in factors influencing the Nike running shoes market.What was the elasticity of demand implied by the information on the Nike running shoes?Is this demand elastic, inelastic, or unit elastic?Make sure to show the formulas you are using in the calculations, and explain why the elasticity is elastic, unit elastic, or inelastic.

b. Assume for the moment that the change in price of Brooks running shoes was the only change in factors influencing the demand for Brooks running shoes.What was the elasticity of demand implied by the information?Is this demand elastic, unit elastic, or inelastic?Show your work and explain why the elasticity is elastic, unit elastic, or inelastic.

c. Say you were a store owner and sold both Nike and Brooks running shoes and you want to increase revenues.If the elasticities and the situations in a and b are correct for the next period, what would you do to your price for each type of laptop in the next period to raise revenue?Explain.

d. We can no longer treat the two markets in isolation.What is your prediction of the sign of the cross-price elasticity between Nikes and Brooks running shoes ?Explain your answer.We are not asking for a numerical answer because there is not enough information provided in the question to give one.

e. If you were trying to calculate a pure estimate of the price elasticity of demand for the Brooks running shoes , what would be the three most important factors that you would want to hold constant in your analysis and how would an increase in each factor influence the demand for Brooks running shoes .Explain.