What to do with price when given elasticity of demand and cross price elasticity
Channel: Econ Examples Travis Klein
Date: 2022-11-22

You are the manager of a high end hotel in downtown Seattle, and the owner of the hotel is concerned with revenue generation from room service and concierge services. The owner believes that the prices for both types of service should be raised in order to increase their revenue. You calculate the following values:
Room Service Concierge Services
Price Elasticity of Demand -1.5 -0.4
Income Elasticity 0.4 0.6
Cross-Price Elasticity 0.05 0.1
The owner wants your opinion on what she should do. What do you recommend?