Solved: What is the arc price elasticity for the product, Macroeconomics

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What is the arc price elasticity for the product

Facts:

Company XYZ Sells Drums Sets. At a price of $600 per set, they sold 500 Sets per month. The new manager decided that the company needed more revenue so she increased the price to $700 per set. However the company is now selling only 200 drum sets per month at the new price.

Required to complete:

Question 1. What is the arc price elasticity for this product? Show work with results

Question 2. What do you recommend for the price of this product; stay at $700 or change higher or lower?

Question 3. What additional information would be useful in the pricing decision?

Question 4. What would be your recommendation for setting up a model to forecast future demand for this product?

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Macroeconomics: What is the arc price elasticity for the product

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Solution Preview :

Prepared by a verified Expert

Macroeconomics: What is the arc price elasticity for the product

Reference No:- TGS01747070

Have a Question? (oR Write a Review)

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Solution Preview :

Prepared by a verified Expert

Macroeconomics: What is the arc price elasticity for the product

Reference No:- TGS01747070

Recent Questions Asked Macroeconomics

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