The Ultrawave Corporation manufactures a line of microwave ovens costing $500 each. Its sales have averaged about 6000 units per month during the past year. In September, Ultrawave’s closest competitor, Kitchen City Corporation, cut its price for a closely competitive model from $600 to $450. Ultrawave noticed that its sales volume declined to 4500 units per month after Kitchen City Corporation announced its price cut.
c. If Ultrawave Corp. knows that the arc price elasticity of demand for its ovens is -3.0, what price would Ultrawave have to charge to sell the same number of units than befor

Question

The Ultrawave Corporation manufactures a line of microwave ovens costing $500 each. Its sales have averaged about 6000 units per month during the past year. In September, Ultrawave’s closest competitor, Kitchen City Corporation, cut its price for a closely competitive model from $600 to $450. Ultrawave noticed that its sales volume declined to 4500 units per month after Kitchen City Corporation announced its price cut.
c. If Ultrawave Corp. knows that the arc price elasticity of demand for its ovens is -3.0, what price would Ultrawave have to charge to sell the same number of units than befor