3.

4.

The strategic tactic of setting a skimming price is useful in which of the following situations? When the firm wishes to maximize short-term profit and when the product has few technical substitutes The firm wishes to maximize short-term profit. The product has few technical substitutes. The new product is relatively elastic. The equilibrium price of music CDs is $8, with XYZ Recordings selling 1,300,000 CDs per month. When XYZ Recordings changes its price to $10 per CD, sales drop to 1,200,000CD s per month. What is the price elasticity of demand for CDs? 0.22 0.36 2.78 0.08