A Special Interest Group Has a Good Chance of Redistributing

question 24

Multiple Choice

A special interest group has a good chance of redistributing (transferring) income from others to itself if the

• A) costs of the transfer are spread over a very large number of people.
• B) costs of the transfer are spread over a very small number of people.
• C) costs of the transfer are spread over the same number of people that comprise the special interest group.
• D) the number of members in the special interest group is greater than 100.
• E) none of the above

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Definitions:

Price Elasticity

The extent to which the amount of a good that is sought after moves due to a difference in price.

Price Reduction

A decrease in the amount charged for a good or service, often used as a sales strategy to increase demand or respond to excess supply.

Demand Elastic

The responsiveness of the quantity demanded of a good or service to a change in its price; higher elasticity means consumers are more sensitive to price changes.

Price Elastic

A term describing how responsive the demand for a good is to a change in its price.