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NissanForums members are smart..
and they can answer these problems
Heres the questions:
An electrical discount store selling hi-fi equipment noticed that during the previous years their Arden 30 watt speakers had sold at a steady average of 200 a month throughout the year. However during June and September, sales had dropped to only 120 units per month. These slack periods seemed to coincide with the months when special offers on the Imai 30 watt speakers brought down the prices from $200 to $160.
A) What is the cross elasticity of demand between Arden and Imai speakers? Does the demand indicate any clear relationship between the two types of speakers?
B) If the retailer wished to promote Arden speakers, what would you predict for that type of speaker if the prices of Imai speakers were raised to $220 from their usual $200?
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