Register to read the introduction…
The impact is a much lower demand in 1987 and 1988.
Note that Gurskis’s demand forecast at $5.20/unit for season 1988-1 (75,000 units) is very close to the amount calculated in the …show more content…
The Industry elasticity was calculated for 1987 and repeated for the years where there no price increase which made the ∆P = 0 and therefore ƞ also = 0. I used the same tactic for Forrester’s elasticity for 1988 at price $5.20/ unit.
Looking into the table above we can infer that price change does and will continue to play a large impact on Forrest’s demand. As mentioned before, Gurskis’s forecast proved to be sound, when calculating quantity demand at ƞ=3.06, and price decrease 18% the new Qd=3.06x18=66% increase which represents demand increase to 131,970 units, very close to forecast. Confirming that in fact consumers will respond strongly to any change in
Note that Gurskis’s demand forecast at $5.20/unit for season 1988-1 (75,000 units) is very close to the amount calculated in the …show more content…
The Industry elasticity was calculated for 1987 and repeated for the years where there no price increase which made the ∆P = 0 and therefore ƞ also = 0. I used the same tactic for Forrester’s elasticity for 1988 at price $5.20/ unit.
Looking into the table above we can infer that price change does and will continue to play a large impact on Forrest’s demand. As mentioned before, Gurskis’s forecast proved to be sound, when calculating quantity demand at ƞ=3.06, and price decrease 18% the new Qd=3.06x18=66% increase which represents demand increase to 131,970 units, very close to forecast. Confirming that in fact consumers will respond strongly to any change in