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Tires Unlimited Inc. finds the following elasticities of demand for its tires: Cross price elasticity of demand for tires with respect to price of batteries

  1. Tires Unlimited Inc. finds the following elasticities of demand for its tires:
  • Cross price elasticity of demand for tires with respect to price of batteries = 0.45
  • Cross price elasticity of demand for tires with respect to price of brake jobs = 0.70
  • Cross price elasticity of demand for tires with respect to price of an oil change = 0.002
  • (Own-) price elasticity of demand for tires (in absolute value) = 6.0

If Tires Unlimited makes the following changes, how will this affect the volume of tires sold (in percentage terms)? Please provide calculations

  1. The price of batteries is decreased by 5%
  2. The price of brake jobs is increased by 2%
  3. The price of an oil change is increased by 3%
  4. The price of tires is increased by 6%

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