Question
Double Take Beauty is a spa in Provo, UT that offers single needle tattoos done by its founder, Sadie Flores. Suppose Sadie charges about $400
Double Take Beauty is a spa in Provo, UT that offers single needle tattoos done by its founder, Sadie Flores. Suppose Sadie charges about $400 per tattoo on average. The marginal cost of each tattoo is about $100. She is getting better at tattooing and the tattoos are becoming more popular with customers, so she is considering raising the price to $500 per tattoo. What percentage of customers must be retained to ensure that the price increase is profitable? Note: It's conventional when not calculating elasticities to measure percentage changes relative to their initial value (%X= new value of x-old value of x/ old value x) What is the answer? a. 18% b. 25% c. 66.67% d. 75% e. 84%
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