(1) First, summarize three key points from the chapter, in one paragraph for each point. Begin your response with an introductory sentence, which identifies the key point or topic that you are going to explain. Explain the topic concisely, in a fashion that would clearly and fully describe the concept to a student in economics.
(2) George has been selling 5,000 T-Shirts per month for $8.50. When he increased the price to $9.50 he sold only 4,000 T-Shirts. What is the demand elasticity? If his marginal cost is $4 per shirt, what is his desired markup and what is his initial actual markup? Was raising the price profitable?
(3) Describe a pricing decision your company has made. Was it optimal? If not, why not? How would you adjust price? Compute the profit consequences of the change.