You have just been hired as a business consultant to determine what pricing policy would be appropriate in order to increase the total revenue of a major shoe store.The first step you would take would be to
A) increase the price of every shoe in the store.
B) look for ways to cut costs and increase profit for the store.
C) determine the price elasticity of demand for the store's products.
D) determine the price elasticity of supply for the store's products.

Question

Quizplus · Accepted Answer

Before making any decisions, it is important to understand how sensitive customers are to changes in price. This can be determined by calculating the price elasticity of demand. Based on this information, appropriate pricing strategies can be developed to increase total revenue. Option A could potentially lead to a decrease in sales, and option B may not necessarily lead to an increase in revenue. Option D is not the most relevant factor when determining pricing policy to increase revenue.

You Have Just Been Hired as a Business Consultant to Determine