A marketing manager reduced the price on a brand of cereal by 10 percent and observed a
Question:
A marketing manager reduced the price on a brand of cereal by 10 percent and observed a 25 percent increase in quantity sold. The manager then thought that if the price were reduced by another 20 percent, a 50 percent increase in quantity sold would occur. What would be your response to the marketing manager’s reasoning?
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The marketing managers reasoning seems to assume a linear relationship between price reduction and quantity sold which might not necessarily hold true ...View the full answer
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Joseph Mwaura
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