Caterpillar Tractor One Of The Largest Producers Of Farm Machinery In The World Has Hired You To Advise It On

Question

Caterpillar Tractor, one of the largest producers of farm machinery in the world, has hired you to advise it on

pricing policy. One of the things the company would like to know is how much a 5-percent increase in price is likely to reduce sales. What would you need to know to help the company with this problem? Explain why these facts are important.

Microeconomics