Other Things Being Equal, the Lower the Value of Elasticity

question 58

Multiple Choice

Other things being equal, the lower the value of elasticity:

• A) the less likely the profitability of a price increase.
• B) the more likely the profitability of a price increase.
• C) the greater the responsiveness in quantity demanded to a price change.
• D) the lower the corresponding increase in firm revenue.

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Definitions:

Usage Tax

A tax imposed on the use of goods or services, typically applied to regulate or discourage certain behaviors.

Average Number

A statistical measure representing the sum of values divided by the count of those values.

Usage Tax

is a tax imposed on the use or consumption of certain goods and services, different from a sales tax which is collected at the time of sale.

Difference-In-Differences

A statistical technique used in econometrics and quantitative research to determine the effect of a specific intervention or treatment by comparing the before-and-after differences in outcomes between a control group and a treatment group.