A bar soap manufacturer has lowered prices twice in the past few years. From these price decreases,

Question:

A bar soap manufacturer has lowered prices twice in the past few years. From these price decreases, the manufacturer has calculated the price elasticity of the market to be –0.8. Given that the market has turned out to be so price inelastic, the manufacturer has decided to try a modest price increase. Use what you know about the value of perceived gains and losses to suggest a problem with the manufacturer’s logic.
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: