A company doing marketing research finds that a 10 percent decrease in its product's price would create a 5 percent increase in the quantity demanded of its product. a. Based on this information, demand for the company's product is . b. Using this same information, the company should the price of its product.

a. - 0.5%

b. Raise

Explanation:

In this question we apply the price elasticity of demand formula i.e shown in the question

The formula to compute the Price elasticity of demand is shown below:

Price elasticity of demand = (Percentage change in quantity demanded) ÷ (percentage change in price)

= 5% ÷ -10%

= - 0.5%

As we can see that the demand is inelastic that means if the price change of a particular good than there is no effect in the demand

b. So in this case, the company should raise the product price

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.