Question

David has a few options regarding Sedona Stout pricing:

Answer 1

Answer:

I would suggest he decrease the sales price.

Explanation:

Because it will might make people rush the product due to its low price compared to other products of another brand.

The low price will create a high demand for the product therefore causing the quantity of the products being produced to increase.

The quality of the product will be very good since the quality is not being reduced only the price therefore it might result in not having the maximum profit needed.

Answer 2

Answer:

I will recommend DECREASE IN SALES PRICE(Option c) in other to increase the demand for Sedona Stout.

With this price decrement, price elasticity will be applicable.

Also, the demand law states that the higher the price, the lower the demand and vice versa.

Explanation:

Increased prices typically result in lower demand, and demand increases generally lead to increased supply. However, the supply of different products responds to demand differently, with some products' demand being less sensitive to prices than others. Economists describe this sensitivity as price elasticity of demand; products with pricing sensitive to demand are said to be price elastic. Inelastic pricing indicates a weak price influence on demand. The law of demand still applies, but pricing is less forceful and therefore has a weaker impact on supply.