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4 May, 05:57

Suppose you are in charge of setting prices at a local ice cream shop. The business needs to increase its total revenue, and your job is on the line. You evaluate the data and determine that the price elasticity of demand for ice cream at your shop is 1.8. You should?

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  1. 4 May, 07:49
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    The price of ice-cream should be reduced.

    Explanation:

    As the price elasticity of demand is 1.8, which is given as

    Price/Demand=1.8

    As the values is greater than 1 this indicates that the price of the ice-cream is more than the demand of the ice-cream.

    This indicates that the price is more so the price of ice-cream should be reduced.
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