4. Read the following article on price elasticity from Harvard Business Review: https://goo.gl/gXSM8y  then use it to answer the following questions:

a.) Do companies prefer to sell products that are more elastic or more inelastic? Briefly explain.

b.) What does the article describe as the best way to calculate price elasticity, and what other information is relevant to inform marketing efforts?

c.) Suppose a marketing company runs a market test and finds that the price elasticity equals -0.6. Would a company be more inclined to increase or to decrease price given this elasticity? Explain what would happen to quantity purchased (by how much it would change) and total revenue (would it increase, decrease, or stay the same) if the company were to decrease price by 10%.

Answer rating: 100% (QA)

a Companies generally prefer to sell products that are less elastic or inelastic This is because pro... View the full answer