If a profit-oriented marketing manager doesn't know the exact shape of the firm's demand curve, marginal analysis:
A) is useless.
B) may be useful anyway-because a profitable region usually surrounds the best price.
C) will suggest the same price as break-even analysis.
D) suggests that the only sensible approach is to follow the market leader.
E) None of these alternatives is true.

Question

Quizplus · Accepted Answer

Marginal analysis can still be useful because there is usually a profitable region that surrounds the best price, regardless of the exact shape of the demand curve. Therefore, a marketing manager can use marginal analysis to determine the optimal price within that profitable region, even without knowing the exact shape of the demand curve.

If a Profit-Oriented Marketing Manager Doesn't Know the Exact Shape