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 price elasticity of demand is -2.76. In your upper western-region your price elasticity of demand is -3.50. In your New England region the price elasticity of demand is -5.76.
Predict the percentage change in quantity demanded if you were to (raise prices) in all three regions by 7%.
Use %Qd/%P = e to complete the estimate
a. %Qd Southwestern
b. %Qd upper western
c. %Qd New England
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