Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 18

You are the manager of a firm that receives revenues of $40,000 per year from product X and $90,000 per year from product Y. The own price elasticity of demand for product X is - 1.5, and the cross-price elasticity of demand between product Y and X is -1.8. How much will your firm's total revenues (revenues from both products) change if you increase the price of good X by 2 percent?