An Internet Company Wants to Increase the Consumption of Internet

question 83

Multiple Choice

An Internet company wants to increase the consumption of Internet packages by 15%.The price elasticity of demand for Internet packages is 2.The telephone company should

• A) lower the price of Internet packages by 30.0%.
• B) lower the price of Internet packages by 7.5%.
• C) lower the price of Internet packages by 3.0%.
• D) raise the price of Internet packages by 0.1%.

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Definitions:

Promotion of Sales

Activities and strategies to increase consumer awareness and sales of a product or service, often temporary to stimulate demand.

Competitor Orientation

A company objective based on the premise that the firm should measure itself primarily against its competition.

Status Quo Pricing

A pricing strategy where prices are set and maintained to match those of the competition or to adhere to existing market conditions, without seeking to disrupt the current market balance.

Average Fares

The median price paid by passengers for transportation services, such as for airline or train tickets.