Individual Problems 6-1
Huiying has been selling 8,000 T-shirts per month for $7.00. When she increased the price to $9.00, she sold only 5,000 T-shirts.
Which of the following best approximates the price elasticity of demand?
-1.8462
-2.2154
-1.6615
-2.0308
Suppose Huiying's marginal cost is $2 per shirt.
Huiying's desired markup is
Before the price change, Huiying's initial price markup over marginal cost was approximately
Since Huiying's initial markup, or actual margin, was
than her desired margin, raising the price was