Question
A firm started advertising its product and this changed the product's elasticity from -2 to -1.5. The firms MC is $5. Using the formula (P
A firm started advertising its product and this changed the product's elasticity from -2 to -1.5. The firms MC is $5. Using the formula (P - MC)/P = 1/ |e| the firm should
| A. | raise price from $10 to $15 | |
| B. | reduce price from $15 to $10 | |
| C. | raise price from $7.50 to $10 | |
| D. | reduce price from $10 to $7.50 |
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E-Commerce 2013 Business Technology Society
Authors: Ken Laudon, Kenneth C Laudon
9th Edition
0132730359, 978-0132730358
