The Price Elasticity of Demand for DVDs Is 2

question 23

Multiple Choice

The price elasticity of demand for DVDs is 2.0. If the price of a DVD increased by 2 per cent, the quantity demanded will _______.

• A) decrease by 1 per cent
• B) decrease by 2 per cent
• C) not change
• D) decrease by 4 per cent

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Definitions:

Marketing Strategy

A comprehensive plan formulated by a business to achieve its marketing objectives, usually involving methods to target and retain customers.

Business Unit

A segment of a larger company, operating within a specific market or sector, that has its own objectives, strategies, and often, financial accountability.

Corporate-Level

Pertaining to decisions, strategies, and processes that affect the entire organization, as opposed to those affecting only individual departments or regions.

Functional

Relating to the practical or useful aspects of something, especially its use or purpose.