In an article in an influential newspaper has published the news about the financial problems of the international division of Apple cell phones. The newspaper reported that the company was losing millions of dollars a year, only with income of 37.5 million dollars. A newspaper analyst said the company's division should increase its price from $75 to $95 per handset, which he estimated would mean several million more revenue a year. The president of the division has assured that the number of cell phones sold could drop from 500,000 currently to 400,000 cell phones sold per year with a price of 95 dollars, so it should go from the price of 75 to 85 dollars to obtain better income without lowering prices. sales ? 

What should be the price elasticity of demand for the information provided by the firm? 

 

 

Answer rating: 100% (QA)

To calculate the price elasticity of demand PED for the information provided by the firm we can use ... View the full answer