Question

When Target charges $71 for a children's game, they sell 100 units. When they charge $66,...

When Target charges $71 for a children's game, they sell 100 units. When they charge $66, they sell 120 units. If they were to give away the game for free, how many units (Q) would be demanded? (Answer is NOT infinity) Enter as a value. ROUND TO THE NEAREST WHOLE NUMBER.

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Answer #1

Solution:-

Given that

When Target charges $71 for a children's game, they sell 100 units.

When they charge $66, they sell 120 units.

If they were to give away the game for free which means price is zero.

So using the elasticity formula and substituting the values

So the quantity will be 384 units when p = 0

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