PCM practice question 25 of 35
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…
Choose your answer, then check it against the explanation.
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?
Question 25 of 35
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