Which of the Following Is True Regarding Price Elasticity

question 107

Multiple Choice

Which of the following is true regarding price elasticity?

• A) The higher the elasticity, the lesser is the volume growth resulting from a 1 percent price reduction.
• B) Within the price indifference band, price changes have little or no effect on demand.
• C) If demand is elastic, sellers will consider increasing the price.
• D) Price elasticity does not depend on magnitude and direction of the contemplated price change.
• E) When demand is inelastic, sellers should lower prices in order to increase total revenue.

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Definitions:

Mental World

The realm of an individual's thoughts, feelings, beliefs, and perceptions.

Physical World

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Normal Accident

A theory suggesting that complex systems such as nuclear power plants are inherently susceptible to failures, no matter how well they are managed.

Risk Society

A society increasingly preoccupied with the future and also with safety, addressing and managing risks that modernity itself has produced.