For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 4 percent.

Tesla Case- Company and Industry Description
January 4, 2018
Given this information, is it surprising that the company’s revenue increased when it decreased the average selling price of its phones? Explain.
January 4, 2018

For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 4 percent.

For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 4 percent. If, as a result of this price increase, the volume of all cereal sold by Big G dropped by 5 percent, what can you infer about the own price elasticity of demand for Big G cereal? Can you predict whether revenues on sales of its Lucky Charms brand increased or decreased? Explain.

 

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