Question
Just a year after you launched the expansion of DWJ, inflation has raised your marginal cost by 7% from $198.33 to $212.21. Your elasticity varies
Just a year after you launched the expansion of DWJ, inflation has raised your marginal cost by 7% from $198.33 to $212.21. Your elasticity varies for each of the three regions in which you sell your DWJ brand. In the southwestern region, your elasticity is -2.76. In your upper-western region the elasticity is -3.50. In your New England region the elasticity is -5.76. Use %Qd/%P = e to estimate the percentage decrease in quantity demanded if you were to raise prices in all three regions by 7%. (Do not include the negative sign when recording your answer. Round to one decimal place, i.e. 10.135 is 10.1)
a. %Qd Southwestern____________
b. %Qd Upper-western___________
c. %Qd New England ____________
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