Which of the Following Describes a Situation in Which Demand

question 220

Multiple Choice

Which of the following describes a situation in which demand must be elastic?

• A) The price of dish soap rises by 10 cents, and quantity of dish soap demanded falls by 50.
• B) The price of dish soap rises by 10 cents, and total revenue rises.
• C) A 20 percent increase in the price of dish soap leads to a 20 percent decrease in the quantity of dish soap demanded.
• D) Total revenue does not change when the price of dish soap rises.
• E) Total revenue decreases when the price of dish soap rises.

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Definitions:

Proactive

Taking initiative by acting in advance of future situations rather than just reacting, thereby controlling circumstances by causing things to happen.

Reactive

Describes a response to events or situations rather than initiating or influencing them.

Customer Needs

The wants or requirements that consumers express to have satisfied by purchasing goods or services.

Black Box Model

A concept in consumer behavior that treats the consumer's mind as a "black box," focusing on the inputs and outputs of the buying process without attempting to interpret what happens inside the mind.