Nile.com, the online bookseller, wants to increase its total revenue. One strategy is to offer a 10% discount on every book it sells. Nile.com knows that its customers can be divided into two distinct groups according to their likely responses to the discount. The accompanying table shows how the two groups respond to the discount.
a. Using the midpoint method, calculate the price elasticities of demand for group A and group B.
b. Explain how the discount will affect total revenue from each group.
c. Suppose Nile.com knows which group each customer belongs to when he or she logs on and can choose whether or not to offer the 10% discount. If Nile.com wants to increase its total revenue, should discounts be offered to group A or to group B, to neither group, or to both groups?
- Anonymous7 years ago
Question c the discount should be offered to both groups because it increased sales and a item is marked up by much more than 10% thus they make more money anyway
- Anonymous5 years ago
Lol @cons are not people! obama created a debt that matches all the presidents collected before obama, and obama did it in one term! obama made america at LEATS 4.6 trillion dollars more in debt! and america's debt is currently at ten trillion and by november will be at least 15 trillion at 6 millions dollars per minute. and thats in not even 4 years 4 YEARS PEOPLE! bush never spent that much! if obama wins again he will make america collapse, (the debt obama created is a world record) please stop being ignorant idiots! if you love your country you will not vote obama again! now to answer your question, i will start trusting the economy when ron paul wins election (i don't mean it as a joke i really mean that! ron will save the economy)