The Furthur Phish Company Has Recorded the Following Data for Three

question 78

Essay

The Furthur Phish Company has recorded the following data for three of their products: $$\begin{array} { l c c c c } \text { Product } & \text { Old Price } & \text { New Price } & \text { Old Quantity } & \text {New Quantity } \\\mathrm { X } & \$ 14.75 & \$ 14.25 & 2,000 & 2,200 \\\mathrm { Y } & 19.25 & 18.50 & 3,000 & 3,300 \\\mathrm { Z } & 24.50 & 27.50 & 4,000 & 3,600\end{array}$$
Required:
a.Determine the price elasticity of demand for each of the products.
b.Which products have an elastic demand? Inelastic demand?

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Definitions:

Function

The specific role or activity for which something is used or responsible within a system, organism, or machine.

Gross Profit Margin

Gross profit margin is a financial metric expressed as a percentage that measures the financial health of a company by indicating the proportion of money left over from revenues after accounting for the cost of goods sold (COGS).

Sales

The transactions in which goods or services are transferred from seller to buyer for money or other compensation.

Cost of Goods Sold

Costs directly linked to the creation of products sold by a firm, such as the expenses for materials and workforce.