The Price Elasticity of Demand for an Agricultural Product Is

question 6

Multiple Choice

The price elasticity of demand for an agricultural product is 0.4.This value means that,when the quantity decreases 1 percent,the price

• A) falls 4 percent.
• B) rises 4 percent.
• C) falls 2.5 percent.
• D) rises 2.5 percent.
• E) rises 0.25 percent.

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Definitions:

Price Discrimination

A pricing approach in which the same provider charges different prices for products or services that are identical or very similar, depending on the market.

Reference Pricing

The practice of setting a price point for a product or service based on the cost of comparable alternatives in the market.

Original Price

The initial selling price of a product or service before any discounts or promotions are applied.

Competitive Price Environment

A market condition in which multiple companies offer similar products or services, often leading to pricing strategies aimed at attracting customers while maintaining profitability.