Suppose You Are the Manager of a Local Water Company

question 149

Multiple Choice

Suppose you are the manager of a local water company, and you are instructed to get consumers to reduce their water consumption by 10 percent. If the price elasticity of demand for water is 0.25, by how much would you have to raise the price of water?

• A) 10 percent
• B) 25 percent
• C) 40 percent
• D) 100 percent

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Definitions:

Behavioral Segmentation

The process of dividing a market into groups based on consumer behaviors, such as purchasing habits or product usage.

Consumer Comparison

The process by which consumers evaluate multiple products, services, or providers against each other based on criteria such as price, quality, and features.

Goods And Services

Products and activities that fulfill the needs or wants of consumers, where goods are physical items and services are intangible benefits.

Ethical Concerns

Matters or situations involving principles of right and wrong behavior that require individuals or organizations to evaluate and act according to ethical standards.