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:

Trial Balance

A bookkeeping report that lists the balances of all ledgers in two columns, debits and credits, which should equal to ensure accuracy in accounts.