Knowing a Product's Price Elasticity of Demand Allows Economists to Predict

question 1

Multiple Choice

Knowing a product's price elasticity of demand allows economists to predict

• A) the amount by which quantity demanded will change in response to a change in price.
• B) how changes in consumers' income will affect sales.
• C) the amount by which quantity supplied will change in response to a change in price.
• D) how quickly consumers will respond to tariff changes.

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Definitions:

Mass Marketing

a marketing strategy that targets a large, general audience with a uniform message, rather than tailoring messages to specific demographic or psychographic segments.

Positioning

The activities a firm undertakes to create a certain perception of its product in the eyes of the target market.

Product's Profit Potential

The expected or estimated ability of a product to generate profit or financial gain.

Test Marketing

Introducing a new product in its final form to a geographically limited market to see how well the product sells and to get reactions from potential users.