Tuesday, July 24, 2007

Unit 1: Price elasticity of demand: Sony PS3

The effect of the price cut for the PS3 in the usa can now be seen


a) The original price was $600 and it was cut by $100. Using this information and the information in the story, calculate the PED for the last 2 weeks following the price cut.
b) Explai what happened to Sony's revenue from PS3 sales in these 2 weeks
c) Evaluate the success of Sony's stratagy given the other information in the article and your knowledge of the concept of PED

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