Knowing the Price Elasticity of Demand Is Important in Business

question 70

Multiple Choice

Knowing the price elasticity of demand is important in business because it allows a manager to determine whether:

• A) a price increase will cause total revenue to rise or fall.
• B) an increase in supply will cause total profit to rise or fall.
• C) a price increase will cause the quantity demanded to rise or fall.
• D) a price increase will cause the demand to rise or fall.

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Definitions:

Living Standards

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class in a certain geographic area.

Birthrates

The number of live births per thousand of population per year, a primary indicator of population growth.

Energy Demand

The total amount of energy required by all users and sectors within an economy or system.

Total Fertility Rate

The estimated total of kids a woman is projected to give birth to during her lifetime, based on existing rates of childbirth.