Microsoft wants to calculate the effect of a worldwide 5% price cut on its sales of Excel to clients in different countries. Microsoft sells Excel at different prices in U.S., Japan and Europe. Before the price cut U.S. sales were twice sales in Japan and Europe. If the price of elasticity of demand in the U.S., Japan and Europe are -3, -4, and -2 respectively, the worldwide sales rise by A) 10%. B) 15%. C) 20%. D) 25%. I know that the answer is C but i want to know how to get it
Microsoft wants to calculate the effect of a worldwide 5% price cut on its sales of Excel to clients in different countries. Microsoft sells Excel at different prices in U.S., Japan and Europe. Before the price cut U.S. sales were twice sales in Japan and Europe. If the price of elasticity of demand in the U.S., Japan and Europe are -3, -4, and -2 respectively, the worldwide sales rise by A) 10%. B) 15%. C) 20%. D) 25%. I know that the answer is C but i want to know how to get it
Chapter6: Elasticities
Section: Chapter Questions
Problem 3P
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Transcribed Image Text:Microsoft wants to calculate the effect of a worldwide 5% price cut on its sales of Excel to clients in different countries.
Microsoft sells Excel at different prices in U.S., Japan and Europe. Before the price cut U.S. sales were twice sales in
Japan and Europe. If the price of elasticity of demand in the U.S., Japan and Europe are -3, -4, and -2 respectively, the
worldwide sales rise by
A) 10%.
B) 15%.
C) 20%.
D) 25%.
I know that the answer is C but i want to know how to get it
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