Related to the Economics in Practice on Page 102: Which

question 136

Multiple Choice

Related to the Economics in Practice on page 102: Which of the following best explains why demand is often more elastic in the long run than it is in the short run?

• A) When demand is elastic, price increases reduce revenue because a small price increase will lead to a large decrease in quantity demanded.
• B) In the long run, consumers have greater access to substitutes.
• C) Consumers tend to postpone making purchasing decisions as long as possible.
• D) In the short run, prices can change rapidly, but in the long run they are more stable.

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Definitions:

Market Segment

A distinct group of potential consumers who share similar needs, desires, and characteristics, targeted by businesses for marketing campaigns.

Cost-based Pricing

Setting the price of a product or service based on the cost of production and distribution plus a markup for profit.

Market Penetration

A measure of the amount of sales or adoption of a product or service compared to the total theoretical market for that product or service.

Growth Strategy

Plans developed by an organization to increase its size, revenue, market share, or competitive position.