Consider a Market in Which Price Is Initially $6 and Falls

question 86

Multiple Choice

Consider a market in which price is initially $6 and falls to $2. If we know that the price effect outweighed the quantity effect, we know the market is _____ and is more likely to be represented by _____.

• A) elastic; Graph A
• B) inelastic; Graph A
• C) elastic; Graph B
• D) inelastic; Graph B

---

Definitions:

Law Firm

A business entity formed by one or more lawyers to engage in the practice of law, offering services such as legal advice and representation.

Advertising Costs

Expenses associated with promoting products services, including media space rentals, production costs, and agency fees.

Product Costs

The total costs associated with manufacturing a product, including direct labor, direct materials, and manufacturing overhead.

Opportunity Costs

The advantages forgone by selecting one option instead of another.