Question
Activity; Apply the Concept: Why does Amazon care about price elasticity? Amazon and book publisher Hachette disagreed on pricing of eBooks in 2014. Amazon estimated
Activity;
Apply the Concept: Why does Amazon care about price elasticity?
Amazon and book publisher Hachette disagreed on pricing of eBooks in 2014. Amazon estimated that the price elasticity of demand for Hachette's e-book was -1,35, so decreasing their price would increase total revenue:
Price of book Copies Sold Total Revenue $14.99 100,000 $1,499,000 $9.99 174,000 $1,738,260
Hachette believed the demand for books by its bestselling authors like James Patterson and J.K. Rowling might be price elastic, but demand for books by less-well-known authors would be price inelastic.
Amazon agreed to let Hachette choose its own pricing. What other factor do you thing matter here?
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Fundamental Accounting Principles
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
20th Edition
1259157148, 78110874, 9780077616212, 978-1259157141, 77616219, 978-0078110870
