If the Price Elasticity of Demand for Gasoline Equals 0

question 221

Multiple Choice

If the price elasticity of demand for gasoline equals 0.3,then an increase in the price of a gallon of gasoline from $3.70 to $3.90

• A) decreases total revenue.
• B) increases total revenue.
• C) leads to no change in total revenue.
• D) makes the demand for gasoline elastic.
• E) Both answers B and D are correct.

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Definitions:

Competition-Led Pricing

A pricing strategy where the prices are determined primarily by the prices of competing products or services in the market.

Ergonomic Chair

A chair designed to provide optimal comfort and support to the body, reducing strain and injuries related to poor posture.

Higher-End Price

A pricing strategy that sets the cost of goods or services at the upper range of the market, targeting consumers willing to pay more for perceived quality or prestige.

Price Skimming

A pricing strategy involving setting high initial prices for a new product to maximize profits from the segment of consumers willing to pay a premium before lowering the price over time.