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Question 3: Hermit, a fashion apparels retailer, recently slashed prices on its premium fashion label, Lau,
by 40%. This resulted in a sharp rise in sales of Lau by 30%. This also directly impacted the sales of its
lower-priced brand, Infinity, which saw sales reduced by 15%. What is the cross-price elasticity of
demand between Lau and Infinity?
A. 0.5
B. 0.37
C. 1.33
D. 2
E. 2.66
Correct Answer: B
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10 days ago

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1 weeks ago

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