Question

If washburn guitars were to lower the price of the maya pro dd75 to $2,499 from $2,699, sales of the guitar would increase 30 percent. This illustrates.

Answer 1

The Washburn guitars reduces their price from  $2,499 to $2,699 as a result of the sales of the product drastically increased by 30%, So this represents that the product has an elastic demand.

What do you mean by elastic demand?

When the price of a product has a massive effect on the quantity purchased is called Elastic demand. A product is stated to have an elastic demand if sales drop sharply in reaction to a growth in price, or sales spike whilst prices are decreased.

Thus, The Washburn guitars reduces their price from  $2,499 to $2,699 as a result of the sales of the product drastically increased by 30%, So this represents that the product has an elastic demand.

Learn more about elastic demand:

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