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Point price elasticity of demand describeed in this solution

Markup on Cost. Brake-Checkup, Inc., offers automobile brake analysis and repair at a number of outlets in the Philadelphia area. The company recently initiated a policy of matching the lowest advertised competitor price. As a result, Brake-Checkup has been forced to reduce the average price for brake jobs by 3%, but it has enjoyed a 15% increase in customer traffic. Meanwhile, marginal costs have held steady at $120 per brake job.

A. find out the point price elasticity of demand for brake jobs.

B. find out Brake-Checkup's optimal price and markup on cost.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M925798

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