- This topic has 2 replies, 2 voices, and was last updated 5 years ago by .
Viewing 3 posts - 1 through 3 (of 3 total)
Viewing 3 posts - 1 through 3 (of 3 total)
- The topic ‘ALG June 2015’ is closed to new replies.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › ALG June 2015
Hi there,
With reference to the above question on the discussion part c)
Details given for every $2 increase in selling price demand would be expected to fall by 2000 units and for every $2 decrease in selling price, demand would rise by 2000 units.
Is right that the PED price elasticity of demand is 100% in this case? and if so…can i comment that since price is very elastic (>1) a target costing approach would be suggested for consideration on top of the current skimming. And i’ll go on explaining two lines into about target costing, whilst also providing some arguments for market skimming.
I’d like to know your opinion on this.. thanks
The PED is not 100% – I don’t know where you got this from. The PED is the % change in the demand / % change in selling price.
The question asks about price skimming and is not asking to discuss anything else.