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The own price elasticity of Anne’s apple pies is 5.

If the aggregate market for apple pies has its own price elasticity of 1.25, Anne’s apple pies have an approximate market share of:


a) 6.25% b) 25% c) 10% d) 20%

Respuesta :

Answer:

Option "B" is the correct answer to the following question.

Explanation:

Given:

Price elasticity of Anne’s apple pies = 5

Aggregate market price elasticity = 1.25

Anne’s apple pies have an approximate market share = ?

Computation of Anne’s apple pies have an approximate market share:

Anne’s apple pies have an approximate market share = (Aggregate market price elasticity / Price elasticity of Anne’s apple pies) × 100

Anne’s apple pies have an approximate market share = (1.25 / 5) × 100

Anne’s apple pies have an approximate market share = (0.25) × 100

Anne’s apple pies have an approximate market share = 25%

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