Mark owns ABC Karate . He has a 2-yr lease and those monthly payments are fixed over that time period. Mark wants to increase his revenues and is trying to decide to raise or lower the monthly fees he charges each student. If his enrollment increases he adds labor costs as he provides a student-teacher ratio of 6 to 1.
a. If he believes that demand for karate lessons are elastic and wishes to increase monthly revenue, should Mark raise or lower lesson fees?
b. If demand for karate lessons is inelastic and Mark wishes to increase profit, what information should he weigh to determine if he should rasie or lower lesson fees