Information on the Price Elasticity of Demand Is Particularly Important

question 30

Multiple Choice

Information on the price elasticity of demand is particularly important to managerial decision making because:

• A)the higher the price elasticity of demand for a product is, the more profitable it will be to produce more of it.
• B)depending on the elasticity coefficient, decision makers will immediately know if a price change will cause profits to increase or decrease.
• C)it allows one to predict how total revenue will respond, i.e., increase or decrease, to a change in price.
• D)as the price elasticity coefficient approaches one, profits will increase.

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Definitions:

Divergent Thinking

A thought process or method used to generate many creative ideas by exploring many possible solutions, often in a spontaneous, free-flowing manner.

Final Topic

The ultimate subject or theme that has been chosen for study or discussion.

Creativity

The ability to produce original, diverse, and valuable ideas or solutions.

Nonconformity

Nonconformity refers to the refusal to align with established norms, rules, or laws within a society or group.