question archive A manager wants to calculate the price of a product produced by the firm she works for
A manager wants to calculate the price of a product produced by the firm she works for
Subject:MarketingPrice:2.88 Bought18
A manager wants to calculate the price of a product produced by the firm she works for. Recent calculations show that the elasticity value of the product produced by the firm is -2 and that the marginal revenue is $20. Given the above, what will be an appropriate price for the product?
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The appropriate price for the product will be $40
The formula to cal
The appropriate price for the product will be $40
The formula to calculate the optimal markup on price is given by:
- MR=P(1+1Ed)P=MR1+1EdMR=P(1+1Ed)P=MR1+1Ed
Hence the appropriate price for the product with product elasticity value of -2 will be P=201−12=$40
culate the optimal markup on price is given by:
- MR=P(1+1Ed)P=MR1+1EdMR=P(1+1Ed)P=MR1+1Ed
Hence the appropriate price for the product with product elasticity value of -2 will be P=201−12=$40
