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 want to increase the sales of your glazed donuts by 30%, in what direction and by how much do you need to change the price?
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Financial And Managerial Accounting
Authors: Charles T Horngren, Jr Walter T Harrison
2nd Edition
0135080193, 9780135080191
