A TV channel has estimated the
e. ‘Home movies’ are a substitute for the TV channel.
f. A 5 per cent increase in income will increase demand by 16 per cent.
g. A 10 per cent increase in price will reduce demand by 12 per cent.
h. Current sales are over a million units a month.
i. The demand curve for the channel is given by:Q=9.83p-1.2
j. The channel’s sales are more affected by the price of ‘home movies’ than by the price of its own service.
k. If the channel increases its price this will reduce its profit.
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