Suppose Microsoft Announces It Is Cutting the Prices of Some

question 147

Multiple Choice

Suppose Microsoft announces it is cutting the prices of some of its software titles (mainly games) by 25 percent. Assuming that Microsoft is seeking to increase revenues, it must believe that the elasticity of demand for these products is

• A) elastic.
• B) inelastic.
• C) of unitary elasticity.
• D) perfectly inelastic.

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