A Product's Price Elasticity of Demand Is Likely to Be

question 68

Multiple Choice

A product's price elasticity of demand is likely to be greater

• A) the less time consumers have to adjust to price changes.
• B) if consumers spend a small proportion of income on the product.
• C) if it only has a few substitutes.
• D) if the product is a luxury good rather than a necessity.
• E) Both answers C and D are correct.

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Definitions:

Accounting Information System

A system of collecting, storing, and processing financial and accounting data used by decision makers.

Data Collection

The process of gathering and measuring information on variables of interest in an established systematic fashion, enabling one to answer stated research questions.

Information Dissemination

The process of distributing or spreading information to a wide audience, often used in contexts of marketing, public relations, and information technology.

Control Accounts

General ledger accounts that consolidate and summarize the detailed information from subsidiary ledgers.