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Chapter 6, Promotional Pricing Question – Beragampengetahuan
QUESTION: In a supermarket, an end-of-aisle promotional display typically makes the demand more elastic (see link) by making customers more aware of price differences between products.
Specifically, suppose that a promotional display changes the price elasticity of demand for a good from -2 to -3. If the normal price is $10, what should the promotional price be?
ANSWER:
- STEP 1: Use the optimal pricing formula from Chapter 6 to solve for Marginal Cost (MC) at the pre-promotional elasticity of -2.
- (PRICE-MC)/PRICE=1/|Elasticity|
- Margin=Target Margin
- ($10-MC)/$10=1/2
- $10-MC=$5
- MC=$5
- STEP 2: Use the optimal pricing formula to solve for the new price at elasticity of -3
- (Price-$5)/Price=1/3
- 3*(Price-$5)=Price
- 2*Price=$15
- Price=$7.50
- CHECK ANSWER:
- ($7.50-$5)/$7.50=1/3
- $2.50/$7.50=1/3
- 3*$2.50=$7.50
- $7.50=$7.50
Contents
kegiatan ekonomi
prinsip ekonomi
ekonomi kreatif, ilmu ekonomi adalah, pelaku ekonomi
, kegiatan ekonomi adalah, sistem ekonomi
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