how-might-a-business-use-knowledge-of-elasticity-to-set-prices-for-a-new-product

Question

How might a business use knowledge of elasticity to set prices for a new product?

Accepted Answer

By setting a price that maximizes revenue based on the elasticity of demand.

Answer

By ignoring elasticity and setting prices based solely on production costs.

Answer

By setting a high price if demand is elastic to maximize revenue.

Answer

By setting a low price if demand is inelastic to increase sales volume.