Demand for a Product Is Likely to Be More Price

question 59

Multiple Choice

Demand for a product is likely to be more price elastic if it

• A) is considered a necessity.
• B) has many substitutes.
• C) is at the mature stage of the product life cycle.
• D) requires a small cash outlay.
• E) is nondiscretionary.

---

Definitions:

Price Decrease

A reduction in the selling price of goods or services, often used as a strategy to increase demand or sales.

Percentage Change

A mathematical calculation that indicates how much a value has increased or decreased as a percentage from its original amount.

Traceable Fixed Expense

Costs that can be directly linked to a specific segment or unit of a business, and do not change with the level of output.

Value-Based Pricing

Value-Based Pricing is a strategy where prices are set primarily on the perceived value to the customer rather than on the cost of the product or historical prices.