If the elasticity remains -2, what selling price would double sales?
I'm having trouble understanding if my logic is correct. Since Elasticity= %variation in quantity / %variation in price, if we want to double sales % variation in quantity would be 100%. Therefore, %variation of price = 100%/-2 = -50% so the price would have to lower by 50% to double sales. Am i correct?
The complete problem:
1. What is the elasticity of demand in relation to the price?
Elasticity = -2 (correct me if i'm wrong)
2. If the elasticity remains identical to that calculated in the previous question, what selling price would double sales in October?
so if we need to reduce by 50% the price would be 90$
I'm having trouble understanding if my logic is correct. Since Elasticity= %variation in quantity / %variation in price, if we want to double sales % variation in quantity would be 100%. Therefore, %variation of price = 100%/-2 = -50% so the price would have to lower by 50% to double sales. Am i correct?
The complete problem:
| August 2019 | September 2019 | |
|---|---|---|
| Prix | 150 $ | 180 $ |
| Volume des ventes | 18 500 | 11 100 |
1. What is the elasticity of demand in relation to the price?
Elasticity = -2 (correct me if i'm wrong)
2. If the elasticity remains identical to that calculated in the previous question, what selling price would double sales in October?
so if we need to reduce by 50% the price would be 90$