Need help with a business question about an online retail operation

Dec 1st, 2015
FratBro23
Category:
Business & Finance
Price: $15 USD

Question description

The online retail operation you recently opened is doing well but you are uncertain of your pricing strategy. Currently the typical customer purchases four items at an average price of $11.96 and for an average transaction size of $47.84. The cost of goods is 60 percent of sales, which yields a gross margin of 40 percent. You are considering lowering prices by 10 percent across the board so you can better compete with other music e-tailers. If you lower prices by 10 percent, you believe that the average number of items purchased per customer would rise by 25 percent.

Review the scenario and address each question while showing work for all mathematical problems. Provide full analysis for all conclusions made.  For any assumptions made, be sure to reference the scenario when providing justification for responses.


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: New York University
PREMIUM TUTOR

Studypool has helped 1,244,100 students

8 Reviews


Summary
Quality
Communication
On Time
Value
ddg82
Dec 10th, 2016
" Thanks, good work "
tinytim47
Nov 26th, 2016
" Wow this is really good.... didn't expect it. Sweet!!!! "
kenmwao2
Nov 25th, 2016
" Solid work, thanks. "
jestin7
Nov 17th, 2016
" This tutor is great! "
lilmoe415
Nov 4th, 2016
" Thank you, Thank you, for top quality work, this is your guy!! "
dontuwannaknow
Oct 12th, 2016
" Excellent work as always thanks so much "
thargrow
Oct 3rd, 2016
" Very Satisfied. "
SjSurvivor143
Sep 29th, 2016
" Thanks for the help. "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1822 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors