Why Are Marketers Interested in Consumers' Levels of Disposable Income

question 199

Multiple Choice

Why are marketers interested in consumers' levels of disposable income?

• A) It accurately predicts future buying power.
• B) It increases current buying power.
• C) It is what is left after taxes and savings to buy luxuries with.
• D) It is a ready source of buying power.
• E) It is essential for forecasting future business trends.

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Definitions:

Price Elasticity

The measure of how much the quantity demanded of a good responds to a change in the price of that good, defined as the percentage change in quantity demanded divided by the percentage change in price.

Estimating Price Elasticity

The process of calculating how sensitive the quantity demanded of a good is to a change in its price.

Price Elasticity

A quantification of demand fluctuation for a product based on its price alteration.

Demand

The amount of a product or service that buyers are ready and able to buy at different price points over a specified duration.