If a 30 Percent Decline in the Price of Gasoline

question 172

Multiple Choice

If a 30 percent decline in the price of gasoline leads to a 15 percent rise in expenditures on gasoline, the price elasticity of demand for gasoline in this range must be

• A) 2.
• B) elastic.
• C) 0.5.
• D) inelastic.

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Definitions:

Product Decision

The process of defining, developing, and managing the production of goods or services that meet customer needs and preferences.

Manage Risk

The process of identifying, assessing, and controlling threats to an organization's capital and earnings.

Tolerate Failure

The capacity of an organization or system to endure and learn from failures without suffering catastrophic consequences.

Value Engineering

A systematic approach to improve the 'value' of products or services by using an examination of function. Value can be increased by either improving the function or reducing the cost.