RCO Manufacturing is an electronics manufacturer and retailer. Its main products are ultrabook computers, PCs and calculators. The current price of the ultrabook is 500, the pc is 800 and the calculator is 40. This year the firm sold 10,000 ultrabooks, 20,000 pcs and 1 million calculators.

In attempt to improve revenue the managers of the firm have decided to increase all prices by 10%. Market research has suggested that the price elasticity of demand for each product

Ultrabook (-) 1.5; PC (-) 2.5; calculator (-) 0.6

You have been asked to evaluate the planned price increases

Cmoment on the planned price changes

Would a 10% price reduction have been better for some or all of the products? What benefit (if any) would advertising bring to the firm