2. At the price of $15, Zeke were able to sell 7,000 ball pens. When he increased the price by $1O, he sold only 5,000 pens. What is the demand elasticity? If his marginal cost is $3 per pen, what is his desired markup and what is his initial actual markup? Was raising the price profitable?

2. At the price of $15, Zeke were able to sell 7,000 ball pens. When he increased the price by $1O, he sold only 5,000 pens. What is the demand elasticity? If his marginal cost is $3 per pen, what is his desired markup and what is his initial actual markup? Was raising the price profitable?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 6.1IP

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2. At the price of $15, Zeke were able to sell 7,000 ball pens. When he increased the price by $10, he sold only 5,000 pens. What
is the demand elasticity? If his marginal cost is $3 per pen, what is his desired markup and what is his initial actual markup? Was
raising the price profitable?

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