Answer:
<u>first case</u>
a) It decrease their price by 27.87%
b) Her revenues increased by 33.44%
<u>second case</u>
a) the demand decrease by 43.32%
b) revenues decreases by -0.2432%
Explanation:
-3.05 = 0.85 / change in price
change in price = 0.85 / 3.05 = 0,278688 = 27.87%
Revenues change:
Revenue = Q x P
Q = (1 + 85%)
P = (1 - 27.87%)
1.85 x 0,7213 = 1,334405
Before revenues where 1 (100%)
Revenues increased by 1.334405 - 1 = 0.334405 = 33.44%
Second case:
<u>variation in demand</u>
0.57 = Change in demand / 0.76
0.57 x 0.76 = Change in demand = 0,4332
<u>change in revenue</u>
Q = (1 - 0.4332)
P = (1 + 0.76)
revenue (1 - 0.4332)(1 + 0.76) = 0,5668 x 1.76 = 0,997568
0.997568 - 1 = -0,002432 = -0.2432%