Question
suppose you own a company that organized desert safaris outside dubai and Dhow cruises along the dubai creek. Bacause of the high temperature and humidity
suppose you own a company that organized desert safaris outside dubai and Dhow cruises along the dubai creek. Bacause of the high temperature and humidity during about six months of the year, you observed that tourists tended to prefer desert over Dhow cruises. Based on this observation and preliminary report prepared by your research staff, you were informed that the cross-price elasticity of demand between desert safaris and Dhow cruises is 1.2. In 2012, your company earned about $530,000 from desert safaris and about $210,000 from Dhow cruises. If the own price elasticity of demand for Dhow cruises is -3, how will a 7 percent decrease in the price of desert safaris affect your overall revenues from both desert safaris and Dhow cruises?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started