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The Swiss luxury watches brand Lolex has calculated that its male model FormulaONE has an income elasticity of around +1

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The Swiss luxury watches brand Lolex has calculated that its male model FormulaONE has an income elasticity of around +1.5. In 2018 sales of 400 units of its FormulaONE watches in UK brought in £3 million to the company. The sales director of Lolex for the UK market has just received a brief with official economic forecast data for the UK economy in 2019. It says that the most optimistic independent forecast for 2019 real incomes is a change of +4% meanwhile the most pessimistic is -2%. The sales director has decided that there will be no price changes for the coming year.

1. Calculate the best case forecast for Lolex FormulaONE watches sales in UK in £s in 2019 (real incomes increase by 4%).Optimistic forecast

2. Calculate the worst case forecast for Lolex FormulaONE watches sales in UK in £s in 2019 (real incomes fall by 2%). Pessimistic forecast