You have been hired to predict the effects of increasing the price of iTunes songs by 10?%. You are interested in the effects of the price hike on the number of songs downloaded legally from? iTunes, the number of songs downloaded legally from other online music? stores, the number of iPods? sold, and the number of CDs sold in stores.
Given the hypothetical elasticities in the following? table, fill in the blanks. Recall that the price elasticity of demand is reported in absolute value. ? But, you must determine if the? "predicted change in quantity? demanded" should be reported as positive or?negative--positive if quantity demanded will? increase, and negative if quantity demanded will decrease.
If your answer is? negative, include a negative sign before the number. If your answer is? positive, do? *not* include a positive sign.
(Product ) (Price Elasticity or Cross- Price Elasticity)
Itunes Songs 1.25(absolute value)
Songs from other online music stores +1.50
Ipod Players -0.50
CDS in Stores +1.60
(Predicted Change in QTY Demanded)=?%