Question
Penny works in a cheesecake factory which sells only cheesecakes. She informs her manager, Phoebe, that whenever the shop offers a 10% discount in its
Penny works in a cheesecake factory which sells only cheesecakes. She informs her manager, Phoebe, that whenever the shop offers a 10% discount in its prices, the sales volume increases by 11%. Therefore, she suggests that the shop should permanently reduce the price by 10% in order to increase the dollar value of the sales. Phoebe rejects the idea. After a month Penny again comes up with another observation. She finds out that a 5% discount in cake price would increase the sales volume by 6%. This time Phoebe accepts her proposal. If Pennys first suggestion is to be accepted, what should be the minimum sales growth the factory should have post-discount so that it is acceptable to Phoebe.
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