Domino Sugar Company is considering buying Fisher Honey Company for $100 million

Question

Domino Sugar Company is considering buying Fisher Honey Company for $100 million. Based on information obtained from 500 supermarkets around the country, when the price of 1 lb. of Domino Sugar was reduced by 10 percent, the average number of 1 lb. boxes of sugar rose by 20 percent. The following week, when 1 lb. boxes of Fisher Honey was reduced by 10 percent, the number of boxes of honey sold increased by 15 percent . If the sale of Fisher Honey to Domino Sugar goes through, what changes to each products price Domino Sugar make?

A. Increase the price of both, but increase the price of Fisher Honey more B. Increase the price of both, but increase the price of Domino Sugar more C. No change D. Lower the price of both

Explanation / Answer

B. Increase the price of both, but increase the price of Domino Sugar more

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