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Calculate point price elasticity of demand for pel

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Reference no: EM132410821

PEL prides itself on innovative home appliances geared towards the modern consumer. With the start of winter season PEL has announced 2% discount off the average price of refrigerators sold during the month of October in an effort to reduce excess end-of-themodel-year inventory. Customer response was wildly enthusiastic, with unit sales rising by 20% over the previous month's level. 

Requirement: 

a. Calculate the point price elasticity of demand for PEL refrigerators sold during the month of August.

b. Calculate the profit-maximizing price per unit if PEL has Rs.30, 600 marginal selling costs.

Reference no: EM132410821

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