Question: Office Enterprises (OE) produces a line of metal office file cabinets. The company’s economist, having investigated a large number of past data, has established the following equation of demand for these cabinets:

Q = 10,000 + 60 B – 100 P + 50 C where

Q = Annual number of cabinets sold

B = Index of nonresidential construction

P = Average price per cabinet charged by OE

C = Average price per cabinet charged by OE’s closest competitor

What will be the new sales forecast if OE reacts to the decrease mentioned in the previous question by lowering its price to $37? (The competitor’s price will now be $32 and the firm’s own price will be $37.)

Price: $2.99

Solution: The downloadable solution consists of 1 pages
Deliverable: Word Document