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What is the different between price effect and sales effect?
Both relate to Elasticity and Total Revenue:
a. A price effect: After a price raise, all unit sold sells at a higher price that tends to increase revenue.
b. A sales effect: After a price raise, fewer units are sold that tends to lower revenue.
In 1999 Mercedes-Benz USA adopted a new pricing policy, which it called NFP (negotiation-free process), that sought to eliminate price negotiations between customers and new-car de
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