Evaluate the wisdom of the firms pricing policy

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Reference no: EM13859924

The Hanover Manufacturing Company believes that the demand curve for its product is

P =5 -Q

where P is the price of its product (in dollars) and Q is the number of millions of units of its products sold per day. It is currently charging a price of $1 per unit for its product.

a. Evaluate the wisdom of the firm's pricing policy

b. A marketing specialist says that the pricing elasticity of demand for the firm's product is - 1.0. is this correct?

Reference no: EM13859924

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