(a)[1]
If FWB raises spending on promotion by 20% and the promotional elasticity of demand is 0.8, calculate the percentage change in FWB’s revenue.
(b)[3]
Refer to lines 30–32. Calculate the estimated price elasticity of demand if FWB raises the price of coffee from $2.00 to $2.30.
(c)[12]
Evaluate the usefulness of the concept of elasticity of demand to FWB when deciding on a new marketing mix.