Ch 5Boing Congratulationsl Youve just been promoted to the S

Ch. 5-Boing! Congratulationsl You\'ve just been promoted to the Store Manager position for a new location of the MegaMart storesl They\'re a young company- only 5 stores, so they\'re letting the managers make lots of decisions to see what works\': That said, the bonus you hope to earn is based on top line (revenue) sales (not net profit, but you won\'t have a job if you drop the profit very much at all) S the ele c roncs depart men ust retail price, in hopes of selling more than expected ot course, once the owner (Bob Mega) hears of this, he absolutely flips got a new gadget (the Guzzywg) and you\'ve decided to cut the price by 10% off of the suggested out, calls you directly, and wants to know whether you\'ve been keeping up on the news? So, what news stories might he have read that caused him to think that this was a bad move for the G

Solution

Ans

It could be that he has read that demand here is inelastic. In this situation fall in price will reduce profits