Here are my answers, am i on the right path? Small business (2%/3%)…

Question Answered step-by-step Here are my answers, am i on the right path? Small business (2%/3%)… Image transcription text6. OfficeForce, a company that sells commercial real estate, needs to increase total revenue by year-end. Onestrategy is to discount the price of office space in a commercial building by 3%. The research team atOfficeForce has divided its prospective customers into two groups according to their likely respo… Show more… Show moreHere are my answers, am i on the right path?Small business (2%/3%) = 0.6%Government services (10%/3%) = 3.3%The Small Business clientele are going to have an inelastic demand since it is (0.6%) less than 1, while Government Services (3.3%) will have a price elasticity demand since it is over 1. The Small Business group’s quantity demanded will move only slightly in relation to the change in price. When demand is elastic, like in the case with Government services, the demand response will be over 3 times as large as in the change in price – meaning the larger price elasticity allows a larger response of the quantity demanded in regards to price change.The price of Government services should be the focus of the discount; since it has more elastic demand it will be able to provide a greater rise in demand compared to the Small Business group, whom will only experience a small change in demand.  Business Economics Microeconomics BUSI 100 100 Share QuestionEmailCopy link Comments (0)