A price rise from $10 to $15 constitutes a 50 percent change if the original price ($10) is used in figuring the percentage ($5/$10), or a 33 percent change if the price after the change ($15) is used ($5/$15). For small changes, the distinction is not important, but for large changes, it is. To avoid this confusion, economists use what technique?

A price rise from $10 to $15 constitutes a 50 percent change if the original price ($10) is used in figuring the percentage ($5/$10), or a 33 percent change if the price after the change ($15) is used ($5/$15). For small changes, the distinction is not important, but for large changes, it is. To avoid this confusion, economists use what technique?

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 6MC

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