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An elasticity of what would be required to offset a 12.5% price reduction in a 40% contribution margin situation? 1)-3.64 2) -2.00 3)-3.33 4) -1.00

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter12: More Realistic And Complex Pricing

Section: Chapter Questions

Problem 12.1IP

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Question

An elasticity of what would be required to offset a 12.5% price reduction in a 40%
contribution margin situation?
1)-3.64
O2)-2
-2.00
3) -3.33
4) -1.00

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