An end-of-aisle price promotion changes the price elasticity of a good from -4 to -5. Suppose the normal price is $48, which equates marginal revenue with marginal cost at the initial elasticity of -4. What should the promotional price be when the elasticity changes to -5? (Hint: In other words, what price will equate marginal revenue and marginal cost?) $45.00 O $27.00 O $36.00 O $31.50

An end-of-aisle price promotion changes the price elasticity of a good from -4 to -5. Suppose the normal price is $48, which equates marginal revenue with marginal cost at the initial elasticity of -4. What should the promotional price be when the elasticity changes to -5? (Hint: In other words, what price will equate marginal revenue and marginal cost?) $45.00 O $27.00 O $36.00 O $31.50

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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An end-of-aisle price promotion changes the price elasticity of a good from -4 to -5. Suppose the normal price is $48, which equates marginal
revenue with marginal cost at the initial elasticity of -4.
What should the promotional price be when the elasticity changes to -5? (Hint: In other words, what price will equate marginal revenue and marginal
cost?)
O $45.00
O $27.00
O $36.00
O $31.50

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