A local sports store had been selling an average of 187 jogging outfits per month over 6 months at $48.07 each. The price elasticity of Demand for there jogging outfits was estimated to be -1.49. Recent government regulations and transportation costs have increased costs considerably resulting in higher prices for all items. Due to higher unemployment combined with higher store prices inventory levels have exceeded acceptable levels. It is time to take some action and to try to generate some traffic into the store. If the sports store has a special sale and decreases the price of the outfits by 20% how many jogging outfits will the sports store sell? ** HINT - use the basic formula: Elasticity = (Unknown Q / Change in Price) x (Average Price / Average Quantity sold) ** enter your answer for HOW many jogging outfits will be sold FOLLOWED by whether the elasticity value is inelastic or elastic. e.g. 174 elastic or e.g. 214 inelastic Answer:

A local sports store had been selling an average of 187 jogging outfits per month over 6 months at $48.07 each. The price elasticity of Demand for there jogging outfits was estimated to be -1.49. Recent government regulations and transportation costs have increased costs considerably resulting in higher prices for all items. Due to higher unemployment combined with higher store prices inventory levels have exceeded acceptable levels. It is time to take some action and to try to generate some traffic into the store. If the sports store has a special sale and decreases the price of the outfits by 20% how many jogging outfits will the sports store sell? HINT - use the basic formula: Elasticity = (Unknown Q / Change in Price) x (Average Price / Average Quantity sold) enter your answer for HOW many jogging outfits will be sold FOLLOWED by whether the elasticity value is inelastic or elastic. e.g. 174 elastic or e.g. 214 inelastic Answer:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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