Historical data suggests that in the athletic shoe industry, the price elasticity for shoes is approximately -0.67.
Explain what price elasticity is, and how to interpret the stated elasticity for athletic shoes of -0.67.
Using the price of $100 and the quantity of 100,000 pairs, and the elasticity of -0.67, estimate the expected total unit sales if the shoes were offered at $125 per pair (show your work).
Estimate the price elasticity of this particular pair of shoes if the new price ($125 per pair) results in total sales of 95,000 pairs (show your work).
What effect would you expect the recent economic downturn to have on consumer price elasticity in general?