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Promotional Elasticity

4 (a) Refer to Appendix 2. Calculate: (i) the promotional elasticity of SU beach umbrellas (2 marks)
PLEASE NOTE: Research shows the increase in promotion is likely to raise sales by 15%
Winter 2018 Paper 31

PrED/AED = % change in demand / % change in promotional spending

% change in demand = +15%
% change in promotional spending = 10%
PrED/AED = 15/10 = 1.5 (3 marks)