The most suitable choice here is A) They distribute samples and free trials as a way to gauge public interest in their product.
I hope that helps.
Answer:
PED = 0.67 indicates inelastic demand.
This suggests that reducing the book's price is not advisable.
Explanation:
To calculate price elasticity of demand, we utilize the midpoint formula: {(Q2 - Q1) / [(Q2 + Q1) / 2]} / {(P2 - P1) / [(P2 + P1) / 2]}
PED is computed as follows: {(50 - 40) / [(50 + 40) / 2]} / {(25 - 35) / [(25 + 35) / 2]} = [10 / (90 / 2)] / [-10 / (60 / 2)] = (10 / 45) / (-10 / 30) = 0.222 / -0.333 = 0.67
The value of PED = 0.67 implies that the demand does not respond greatly to price changes.
If you proceed to lower the book's price, the rise in the number of copies sold will not be enough to offset the loss from the reduced price, resulting in financial loss.
