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You have been hired to predict the effects of increasing the price of iTunes songs by 10% from .99 cents to $1.09. 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 iPod players sold, and the number of CDs sold in stores.Give the hypothetical elasticities in the following table fill in the blanks. Recall the conventional practice for the price elasticity of demand of a product uses the absolute value of the elasticity.

Product Price Elasticity or Cross-Price Elasticity Predicted % Change in Quantity Demanded

Itunes Songs 1.50(absolute Value)

Songs from other online stores +2.00

Ipod Players -0.70

CDs In Stores +1.80

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9688195

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