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:

Selection Effect

The bias introduced in analysis results due to the way in which subjects or participants are selected or self-select into a study.

Cohabitation

Being in a romantic and sexual relationship while sharing a living space, without the formalities of marriage.

Celibate Lives

A lifestyle choice where individuals abstain from marriage and sexual relations, often for religious, cultural, or personal reasons.

Shakers

A religious sect known for its communal living, celibacy, and simple lifestyle, named after their practice of ecstatic dancing as part of worship.