Assuming you are the managing director of a firm that produces three goods: A, B and C. The price elasticity of demand for A is 1.2, for B it is 1.00 and for C it is 0.75. It is known that he firm is experiencing serious cash flow problems and you have to increase total revenue as soon as possible. If you were in a position to set the prices for these goods, what would be your pricing strategy for each product

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter15: Imperfect Competition
Section: Chapter Questions
Problem 15.10P: Inverse elasticity rule Use the first-order condition (Equation 15.2 ) for a Cournot firm to show...
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Assuming you are the managing director of a firm that produces three goods: A, B
and C. The price elasticity of demand for A is 1.2, for B it is 1.00 and for C it is 0.75.
It is known that he firm is experiencing serious cash flow problems and you have to
increase total revenue as soon as possible. If you were in a position to set the prices
for these goods, what would be your pricing strategy for each product

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