Optimal Price

question 13

Essay

Optimal Price. Nice Bicycles, Inc., recently offered rebates of $10 off the regular $400 price on Triath model bikes. Sales responded, rising 5% over the previous month's level.
A. Calculate the point price elasticity of demand for Triath bicycles.
B. If marginal cost per unit is $200, was the original $400 price optimal?

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