If the Absolute Price Elasticity of Demand for a Product

question 331

Multiple Choice

If the absolute price elasticity of demand for a product is less than 1, then

• A) the absolute price elasticity of demand is inelastic and consumers are relatively insensitive to price changes.
• B) the absolute price elasticity of demand is inelastic and consumers are relatively sensitive to price changes.
• C) the absolute price elasticity of demand is elastic and consumers are relatively insensitive to price changes.
• D) the absolute price elasticity of demand is elastic and consumers are relatively sensitive to price changes.

Explain the conditions required for long-run equilibrium in perfectly competitive firms.

Comprehend the concept of economic profit and loss and its implications on market entry and exit.

Identify factors leading to shifts in industry supply curves.

Grasp the concept of efficient markets and how investment capital flows.

---

Definitions:

Behavioral Inhibition System

A neurobiological system that regulates response to stimuli which signal punishment, non-reward, or novel situations.

Gray's Reinforcement Sensitivity Theory

A theory in psychology that explains human personality and behavior through systems controlling responses to reward and punishment.

Environmental Punishment

A consequence resulting from the natural consequences of an action, rather than a direct intervention from another party.

Projective Measure

A psychological assessment technique where individuals reveal their unconscious thoughts and feelings through the interpretation of ambiguous stimuli.