A firm finds that its price elasticity of demand is 4.0. Currently, the firm is selling 2000 units per month at $5 per um If it wishes to increases its quantity sold by 10%, it must lower its price by: a. 5.40 b. 4.0% c. 2.5% d. $.50
A firm finds that its price elasticity of demand is 4.0. Currently, the firm is selling 2000 units per month at $5 per um If it wishes to increases its quantity sold by 10%, it must lower its price by: a. 5.40 b. 4.0% c. 2.5% d. $.50
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...
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Transcribed Image Text:A firm finds that its price elasticity of demand is 4.0. Currently, the firm is selling 2000 units per month at $5 per unit.
If it wishes to increases its quantity sold by 10%, it must lower its price by:
a. $.40
b. 4.0%
c. 2.5%
d. $.50
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