Examlex

Solved

Andy Has Discovered a New Way to Make Clothes Pegs

question 155

Essay

Andy has discovered a new way to make clothes pegs more cheaply than his competitors.He believes that since he can now sell his clothes pegs at a lower price than other clothes-peg providers on the market, he will be able to increase his revenue by attracting more customers.He estimates the price elasticity of demand for clothes pegs to be 0.7.What will happen to his total revenue if he decreases the price of his clothes pegs? What should Andy do?


Definitions:

Scientific Law

A statement based on repeated experimental observations that describes some aspects of the universe, always under the same conditions.

Mathematical Formula

A concise way of expressing information symbolically, as in a mathematical or chemical equation.

AIDA Model

A marketing model that describes the stages a customer goes through in the process of purchasing a product, including Attention, Interest, Desire, and Action.

Integrated Marketing Communications

A holistic approach to marketing communications that ensures all forms of communication and messages are carefully linked together.

Related Questions