The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over their past year. Recently, its closest competitor, Decayfighter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopdecay’s sales declined by 1,500 units per month. a) What is the arc cross elasticity of demand between Stopdecay’s toothbrush and Decayfighter’s toothbrush? What does this indicate about the relationship between the two products?
The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over their past year. Recently, its closest competitor, Decayfighter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopdecay’s sales declined by 1,500 units per month. a) What is the arc cross elasticity of demand between Stopdecay’s toothbrush and Decayfighter’s toothbrush? What does this indicate about the relationship between the two products?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over their past year. Recently, its closest competitor, Decayfighter, reduced the price of its electric toothbrush from $35 to $30. As a result, Stopdecay’s sales declined by 1,500 units per month. a) What is the arc cross
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