supermarket giant, are trying to increase sales of their brand of sliced bread.
They don’t need to make
any extra money overall on this line, as it has been proved that just
getting more people into the store, buying bread, increases sales of other goods
This is the idea of the
‘loss-leader’ line of goods that every supermarket targets advertising at.
They hope to increase sales
by dropping the price by 5%, and would like to keep their total earnings
about the same.
What percentage increase
in sales will they need to see, in order to achieve this ‘break even’?
Why won’t a 5% increase
in sales compensate for the 5% decrease in price ?
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