Multiple Choice
In 2003,when music downloading first took off,Universal Music slashed the average price of a CD from $21 to $15.The company expected the price cut to boost the quantity of CDs sold by 30 percent,other things remaining the same.If you are making the pricing decision at Universal Music,what would you do?
A) lower the price because demand is inelastic
B) raise the price because demand is elastic
C) raise the price because demand is inelastic
D) lower the price because demand is elastic
E) not change the price because demand is unit elastic
Correct Answer:
Verified
Correct Answer:
Verified
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