"Without application, the benefits of knowledge cannot be fully achieved." - Roger J. Best
8.4 Price-Volume Pricing (Figures 8-22 to 8-24)
The price elasticity for personal computers is estimated to be -2.0. For the PC manufacturer shown, evaluate the sales and profit impact of a 10 percent price increase and a 10 percent price decrease.
For each pricing strategy, determine the break-even market share and discuss the profit risk associated with it.