Which of the Following Statements About the Price Elasticity of Demand

question 110

Multiple Choice

Which of the following statements about the price elasticity of demand is correct?

• A)The price elasticity of demand for a good measures the willingness of buyers of the good to buy less of the good as its price increases.
• B)Price elasticity of demand reflects the many economic,psychological,and social forces that shape consumer tastes.
• C)Other things equal,if good x has close substitutes and good y does not have close substitutes,then the demand for good x will be more elastic than the demand for good y.
• D)All of the above are correct.

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Definitions:

Barriers to Entry

Factors that prevent or hinder companies from entering a specific market or industry, including high startup costs, strict regulations, and established competition, which can protect existing firms from new entrants.

Artificial Differences

Distinctions created or imposed in a situation or between objects that do not naturally or inherently exist.

Horizontal Differentiation

A strategy where products are made different from those of competitors on aspects other than price, such as quality or features, while aimed at satisfying the same basic need.

Product Mix

The variety of products a company offers for sale to meet market demand and enhance profitability.