You are a pricing manager at a generic pharmaceutical distributor. The CEO of the company calls a meeting of all the managers and states that it is critical to increase revenue soon or you may have to start laying off employees. You know that the price elasticity of demand for your leading generic drug is 1.5 and you sell it for three times what it costs.

Q: if the price elasticity of demand for a product is 2.5, then a price cut from $2.00 to $1.80…

A: The price elasticity of demand for a product is 2.5.The price reduces from $2.00 to $1.80.

Q: Calculate the markup price if MC = $10 and price elasticity equals -2.

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Q: Elasticity is expressed in both positive and negative values   True  False

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A: Ed = Percentage change in sales/Percentage change in money spent on advertising

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Q: Why is price stability difficult to achieve inonline and global marketing?

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