You have just been hired as a business consultant to determine what pricing policy would be appropriate in order to increase the total revenue of a bakery.The first step you would take would be to
A) increase the price of every loaf of bread in the store.
B) look for ways to cut costs and increase profit for the bakery.
C) determine the price elasticity of demand for the bakery's products.
D) determine the price elasticity of supply for the bakery's products.

Question

Quizplus · Accepted Answer

The first step in determining an appropriate pricing policy for the bakery would be to analyze the price elasticity of demand for their products. This would allow for an understanding of how changes in price will affect the quantity demanded, and therefore the total revenue of the bakery. Without this information, it would be difficult to determine whether increasing prices would lead to an increase or decrease in revenue. Option A may not be feasible without understanding the price sensitivity of the customers. Option B may be helpful, but the focus is to increase the total revenue, not necessarily the profit margin. Option D would not be relevant in determining the appropriate pricing policy.

You Have Just Been Hired as a Business Consultant to Determine