Market analysts for a large cereal company estimated that the price elasticity of demand for presweetened cereal is 1.97,but that the entire market for ready-to-eat cereals exhibits a price elasticity of demand of 0.36.Marketers collect this type of information in which step of the price-setting process?
A) identifying pricing objectives and constraints
B) estimating demand and revenue
C) estimating the break-even point
D) selecting an approximate price level
E) making special adjustments to list or quoted price

Question

Quizplus · Accepted Answer

The given information about the price elasticity of demand for presweetened cereal and the entire market for ready-to-eat cereals is used in estimating demand and revenue, which is a step in the price-setting process. The other options are not relevant to the given scenario.

Market Analysts for a Large Cereal Company Estimated That the Price