Selling to the same or to different group of customers

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There are two companies, A and B. Company A lowers its price for a certain product by 6% and sees an increase of about 12% in revenues.

Company B tries a similar move: it lowers its price by 6%, but its revenues go down by 3%.

a) Explain what is happening in the cases of Company A and Company B.

b) What do you think might be the difference between the two companies? Are they selling the same or a very similar product? Are they selling to the same or to a different group of customers?

Reference no: EM131172704

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