Chapter+Seventeen_shortened[1]

Chapter+Seventeen_shortened[1] - Marketing 350 Fall 2010...

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Click to edit Master subtitle style Marketing 350 Fall 2010 Chapter Seventeen: Price Setting
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Chapter 17: Price Setting Demand Curve Ø Downward Ø Inverse relationship between
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Chapter 17: Price Setting Price Elasticity of Demand Ø Change in quantity demanded Ø Elastic demand versus
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Price Elasticity of Demand (Q1 - Q2) (Q1 + Q2) 2 (P1 - P2) (P1 + P2) 2 Ed = [ ] [ ]
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Price Elasticity of Demand Ø Example: At $8 per sub sandwich, At $4 per sub sandwich,
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Price Elasticity of Demand (3 - 9)/[(3 + 9)/2] (8 - 4)/[(8 + 4)/2] Ed = Ed =
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Price Elasticity of Demand Ø Cross elasticity of demand » Substitutes » Change in quantity demanded for Product A to
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Cross-Price Elasticity of Demand Change in Quantity Demanded for Product A Change in Price for Product B If Ec is positive, If Ec is negative, Ec =
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Cross-Price Elasticity of Demand Product Price A Adidas B Nike Quantity Demanded A Adidas B Nike
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Cross-Price Elasticity of Demand If Nike lowers price to $ 68 : Demand for N ike increases to Demand for Adidas decreases to
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Cross-Price Elasticity of Demand -20,000 2 00,000 - $ 4 $72 Products are Sizeable Ec =
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Generalizations About Price Elasticities Ø Elasticities may Ø Larger market share brands often have
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Generalizations About Price Elasticities Ø Price elasticities exceed
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Sensitive When. .. Ø
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Chapter+Seventeen_shortened[1] - Marketing 350 Fall 2010...

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