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Company A: Price=10; Cost=7; Market Share=50% Company B: Price=9; Cost=6; Market Share=25% Industry |e| = 1.5 *remaining MS (25%) multiple other firms. Given the industry
Company A: Price=10; Cost=7; Market Share=50%
Company B: Price=9; Cost=6; Market Share=25%
Industry |e| = 1.5
*remaining MS (25%) multiple other firms.
- Given the industry |e| , what should we expect with regards to price changes?
- Do these 2 companies face the same PED (|e|)?
- Are either, both or neither selling at the right margin?
- Can you recommend a new price(s), if necessary?
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Authors: Jeffrey F Beatty, Susan S Samuelson
3rd Edition
0324537115, 9780324537116
