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You have been hired as a price analyst for the Mountain Madness Bicycle Company. They want...

You have been hired as a price analyst for the Mountain Madness Bicycle Company. They want your advice about pricing for their top selling Buffalo Bomber downhill descender model. More specifically, they want to know the impact of price, buyers’ income, and price of competitor on the sales. You have been given the following data to do the analysis Year 2018 2019 Units Sold 8,000 12,000 Price Per Unit $1,200 $700 Average Income of Buyer $40,000 $50,000 Price of Main Competitor $900 $1,000 (c) Calculate the cross price elasticity by using point elasticity and explain that impact. (SHOW YOUR WORK)

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Thus we can see that for unit rise in price of X , quantity demanded for our Bicycle rises by 4.5 units . So our bicycle is a very strong competitor and has higher value than other substitutes available .

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