Suppose that “Colgate” sells its standard size toothpaste for Ksh 35. Its sales have been on an average 9000 units per month. Recently, its close competitor “Close–Up” reduced the price of its...

Suppose that “Colgate” sells its standard size toothpaste for Ksh 35. Its sales have been on an average 9000 units per month. Recently, its close competitor “Close–Up” reduced the price of its standard size toothpaste from Ksh 45 to Ksh 40. As a result, Colgate’s sales declined by 2500 units per month. (i) What is the own-price elasticity of Colgate when the price rises from Ksh 35 to Ksh 40?Suppose that “Colgate” sells its standard size toothpaste for Ksh 35. Its sales have been on an average 9000 units per month. Recently, its close competitor “Close–Up” reduced the price of its standard size toothpaste from Ksh 45 to Ksh 40. As a result, Colgate’s sales declined by 2500 units per month. (i) What is the own-price elasticity of Colgate when the price rises from Ksh 35 to Ksh 40? (ii) Calculate the cross elasticity of demand between the two products on the market and show how the two products are related.