What should the promotional price be elasticity changes

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Individual Problems

An end-of-aisle price promotion changes the price elasticity of a good from -2 to -3. Suppose the normal price is $26, which equates marginal revenue with marginal cost at the initial elasticity of -2.

What should the promotional price be when the elasticity changes to -3? (Hint: In other words, what price will equate marginal revenue and marginal cost?)

$15.60

$19.50

$11.70

$13.65

Reference no: EM133253730

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