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Testing pricing power: a 10 percent price rise
The prompt
Illustrative numbers, fictional companies. Two juice makers in Saudi Arabia each spend SAR 2.00 to make and deliver a bottle. The branded one sells at SAR 3.20 and spends SAR 0.30 a bottle on marketing. The unbranded one sells at SAR 2.50 with no marketing. Both raise prices by 10 percent. The branded maker loses 4 percent of its volume; the unbranded maker loses 40 percent. What happens to profit per 100 bottles they sold before?
Your interviewer will share data as you ask for it. Ask clarifying questions, state a hypothesis, then lay out your structure out loud before you calculate.
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