Price Elasticity of Demand
{"Image DocumentName": "Price Elasticity of Demand", "Image ImageDescription": "Apple Almond. Suppose the managers of Nature\u2019s Garden believe that every 10 percent increase in the selling price of its apple-almond shampoo will result in a 15 percent decrease in the number of bottles of shampoo sold. Let\u2019s calculate the price elasticity of demand. For its strawberry glycerin soap, managers of Nature\u2019s Garden believe that the company will experience a 20 percent decrease in unit sales if its price is increased by 10 percent. Here is information provided to us by Nature\u2019s Garden. The first piece of information concerns the company\u2019s apple-almond shampoo, and the second is related to its strawberry glycerin soap. We have been given management\u2019s best estimate of the change in price and resulting change in unit sales. Managers believe that a 10 percent increase in the selling price of their apple-almond shampoo will result in a 15 percent decrease in the number of bottles sold. For its strawberry glycerin soap, managers believe that the company will experience a 20 percent decrease in unit sales if its price is increased by 10 percent. Let\u2019s calculate the price elasticity of demand for these two products. We will start with the apple-almond shampoo.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}