Question
You are the manager for Dunkin Donuts and know the following elasticities: n=1.5 n1= 1.2 nxy1= 0.5 nxy2= -0.5 N is the price elasticity of
- You are the manager for Dunkin Donuts and know the following elasticities:
n=1.5 n1= 1.2 nxy1= 0.5 nxy2= -0.5
N is the price elasticity of demand for Dunkin Donuts (DD) glazed doughnuts. Nxy1 is the cross elasticity of demand between DD glazed and Krispy Kreme (KK) glazed doughnuts. Nxy2is the cross elasiticy of demand between DD glazed doughnuts and DD French Vanilla coffee, andn1 is the income elasticity of DD glazed doughnuts.
If you make the percentage price change that you calculated in part a) will total revenue increase of decrease?
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Managerial Economics and Business Strategy
Authors: Michael R. baye
7th Edition
978-0073375960, 71267441, 73375969, 978-0071267441
