If the Price Elasticity of Demand Is 1

question 84

Multiple Choice

If the price elasticity of demand is 1.5,regardless of which two points on the demand curve are used to compute the elasticity,then demand is

• A)perfectly inelastic,and the demand curve is vertical.
• B)elastic,and the demand curve is a straight,downward-sloping line.
• C)perfectly elastic,and the demand curve is horizontal.
• D)elastic,and the demand curve is something other than a straight,downward-sloping line.

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Definitions:

Price Leadership

Price leadership occurs when a leading firm in an industry sets the price of goods or services, and other firms in the market follow suit, often seen in oligopolistic markets.

Price Wars

A competitive situation where retailers or producers continuously lower prices to undercut competitors, often leading to reduced profit margins for all involved.

Oligopolists

Oligopolists are firms or entities that operate in an oligopoly, a market structure characterized by a small number of sellers that have significant control over market prices and conditions.

Sales Growth

The increase in sales over a specific period, indicating the degree to which a company's revenue performance is improving or declining.