(A) In each of the following situations, what type of pricing strategy would typically be appropriate? Explain your reasoning. (9 pts.)

a. Market demand is inelastic and company demand is elastic.

b. A firm has a distinct quality advantage.

c. A firm is not producing at full capacity and company demand is elastic.

(B) A retailer notes that a line of woks is selling at a rate of 80 per week. When the price is cut from $36 to $30, sales increased to 110 per week.

(a) What is the price elasticity of demand?

(b) What happens to the revenue?

(c) What price should the retailer place on the woks and why?(9 pts)