Question

Given the above predicted changes in quantity demanded by region, use the stay even analysis %ΔQd = %ΔP/(%ΔP +margin): Can you raise prices by 7% in any of the regional markets? State your conclusion and then show the all the steps supporting your conclusion. Note: Assume from problem 3 on Problem Set 1 that the optimal prices by region are: Southwest region $311; Upper West region $278; and Northeast $240. Please write your conclusion case study style in the dialogue box.

Answer 1

Based on the stay even analysis, it can be concluded that a 7% increase in price would lead to a decrease in the quantity demanded.

How to explain the stay even analysis?

The stay even analysis %ΔQd = %ΔP/(%ΔP +margin) can be used to determine if a price increase of 7% would result in a decrease in quantity demanded that is less than the increase in quantity demanded.

The optimal prices by region are Southwest region $311; Upper West region $278; and Northeast $240. The stay even analysis for the Southwest region is as follows:

%ΔQd = %ΔP/(%ΔP +margin)

= 7%/7.5% = 93.33%.

This means that a 7% increase in price would result in a decrease in the quantity demanded.

Learn more about even analysis on:

brainly.com/question/2846088

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