Business Owners Are Speaking About the Price Elasticity of Demand

question 44

Multiple Choice

Business owners are speaking about the price elasticity of demand without using the actual term.Which one of the following statements describes a good with a price elastic demand?

• A)"A price cut won't help me.It won't increase sales,and I'll just get less money for each unit."
• B)"I don't think a price cut will make any difference to my bottom line.What I may gain from selling more I would lose on the lower price."
• C)"My customers are real bargain hunters.Since I set my prices just a few cents below my competitors,customers have flocked to the store,and sales are booming."
• D)"With the recent economic recovery,people have more income to spend and sales are booming,even at the previous prices."
• E)"A very cold winter has increased my sales of skates and hockey sticks."

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Definitions:

More Affluent

Having a greater amount of wealth or resources; typically used to describe individuals or areas with a higher economic status.

Downward Mobility

The phenomenon where individuals or groups experience a decline in their socioeconomic status.

Federal Poverty Line

Federal index that defines “official” poverty in the United States based on household income; updated annually.

Official Poverty

A governmentally determined poverty threshold that indicates the minimum level of income required to meet basic needs.