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APPMaster produced and test marketed a digital product that is particularly appealing to millennials The variable cost per unit is $540 Test markets research predicts that global monthly sales will

APPMaster produced and test marketed a digital product that is particularly appealing to millennials. The variable cost per unit is $5.40. Test markets research predicts that global monthly sales will be 17,000 downloads (sales) at $10 and 9,160 at $14. The elasticity of demand was found to be constant( i.e. curvilinear rather than linear). Suppose APP Master launches a new promotional campaign that reduces target customers sensitivity to price and the elasticity of demand falls by 20% from what you calculated above. What then will be a. new price elasticity of demand? b. optimal gross margin? c. optimal selling price?

May 01 2020 View more View Less

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