Question

A fall in the price of crude oil from $90 per barrel to $80 per barrel leads to an infinite increase in quantity demanded. Calculate the price elasticity of demand?

Answer 1

Answer:

The shareholder of Al-Karam wants to maximize his profits by selling his goods in the larger quantities. In order to achieve his target (s) he hired a manager to look after his business. However, the manager instead of maximizing business profits started maximizing his own interest by selling the designs in black to the competitor’s designers. Analyze the above situation and explain the possible problem that might occur for Al-Karam.