What percent can demand decrease at the new price level

Reference no: EM133357674

Question: Max barbershop is considering raising prices by $5 per haircut. Their current price for a cut is $22 and barbers receive 50% of the revenues for each haircut. Since Max is concerned about demand dropping due to the price increase, he is also planning to start advertising the shop on TV for $1,124/month. If current fixed costs are $12,175/month, and the current profit is $2000/month, by what percent can demand decrease at the new price level and maintain current levels of profit on the business?

Reference no: EM133357674

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