What level should price be set to restore sales to the level of 10500 potted plants?

Landscapes Inc. is a leading distributor of potted plants and their maintenance for business enviro Show more Landscapes Inc. is a leading distributor of potted plants and their maintenance for business environments. Demand for Interiors services is tied to the overall pace of business activity and therefore is sensitive to changes in national income. The greenery service sector is highly competitive so Interiors demand is also very price-sensitive. During the past year Interiors sold 10500 potted plants at an average wholesale price of $25 per plant. This year per capita income is expected to fall from $34200 to $30600 as the nation enters a steep recession. Without any price change Interiors expects current-year sales to fall to 7500 potted plants. A) Calculate the arc income elasticity of demand. B) Given a price elasticity coefficient on -1.5 and the projected fall in sales to 7500 to What level should price be set to restore sales to the level of 10500 potted plants? Show less

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