point price elasticity of demand
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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. Calculate the point price elasticity of demand for brake jobs.
B. Calculate Brake-Checkup's optimal price and markup on cost.
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The expert calculates the point price elasticity of demand in the case.
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A. Calculate the point price elasticity of demand for brake jobs.
Change in average price=-3%
Change in quantity ...
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- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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