Which of the Following Is True of Price Elasticity

question 164

Multiple Choice

Which of the following is true of price elasticity?

• A) The lower the number of substitute products, the higher the price elasticity of demand for a given product.
• B) Rises in income can lead to drops in price elasticity even though product prices are constant.
• C) Products for which demand is highly inelastic are susceptible to minor changes in price.
• D) Generally, if demand for a product is inelastic, lowering the price will appreciably increase demand.
• E) Consumers are generally more sensitive to price decreases than to price increases.

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Definitions:

Independent Populations

Populations that have no interaction or relationship with each other, allowing for comparisons without interference.

Means

The average of a set of numbers, calculated by dividing the sum of all the values by the count of the values.

Equal-variances Test

A statistical test used to check if two populations have equal variances.

Student T-distributed

The Student's t-distribution is a probability distribution that is symmetric and bell-shaped, used especially in small sample sizes for estimating population parameters.