Which of the Following Statements Best Describes How a Business

question 108

Multiple Choice

Which of the following statements best describes how a business determines whether to increase or decrease the price of the product it sells in order to increase revenues?

• A) If the price elasticity of demand is greater than 1, total revenue and price changes move in opposite directions.
• B) If the price elasticity of demand is greater than 1, total revenue and price changes move in the same direction.
• C) If the price elasticity of demand is less than 1, total revenue and price changes move in opposite directions.
• D) The price elasticity of demand has little to do with total revenue, and a firm must focus solely on its cost structure to increase revenues.
• E) It will depend on how many firms are competing in the market.

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Definitions:

Tucson

A city in the U.S. state of Arizona, known for its rich history and cultural heritage, including Native American, Spanish, Mexican, and American influences.

Los Angeles

A sprawling Southern California city and the center of the nation’s film and television industry, known for its iconic Hollywood sign.

Miami

A vibrant, culturally diverse city located in southeastern Florida, known for its tropical climate, sprawling beaches, and significant Latin American influence.