The Reason Firms That Face Elastic Demand Should Lower Price

question 132

Multiple Choice

The reason firms that face elastic demand should lower price to increase total revenue is that

• A) demand curves are downward-sloping.
• B) consumers prefer lower prices.
• C) the percentage increase in sales will be larger than the percentage decrease in price.
• D) more consumers will try their products.
• E) the percentage increase in sales will be smaller than the percentage decrease in price.

---

Definitions:

Indirect Cost

Expenses not directly tied to the production of goods or services but necessary for the overall operation, such as administration, utilities, and security.

Operating Telephone System

The infrastructure and processes that support the functionality of telephones, enabling voice communication over distances.

Qualifications

The credentials, such as degrees or certifications, that prove someone's capability or skill in a specific area.

Request For Proposals (RFP)

A document issued by an organization asking for detailed proposals from vendors for the provision of goods or services.