If a One Percent Increase in the Population Leads to a Five

question 14

Multiple Choice

If a one percent increase in the population leads to a five percent increase in the quantity sold,an economist would claim

• A) the good is elastic with respect to population.
• B) the good is inelastic with respect to population.
• C) the good is a fad.
• D) consumers are misinformed about the quality of the product.

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Definitions:

Efficient Scale

The level of production at which average total costs are minimized.

Elasticity Of Demand

Elasticity of demand measures how the quantity demanded of a good changes in response to changes in its price.

Advertising

The activity or profession of producing advertisements for commercial products or services, aiming to influence consumer behavior.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing them to have some control over their prices.