a) Assume that for a product over the price range from $0.40 to $0.50, the relationship between sales and price follows the constant elasticity response model:

Sales = 120 x price^-0.8

Estimate the sales and price elasticity at $0.44.

b) Assume that for a product over the price range from $0.70 to $0.80, the relationship between sales and price follows the logit response model:

Estimate the sales and price elasticity at $0.77.

c) How can we use price response models to help plan a change in brand price?

d) Based on the price elasticity value at $0.77 in this example, how should the marketing manager increase or decrease this price if she or he wants to increase revenues for the product? Why?