The Statement Which Explains Why a Firm Would Be Interested

question 37

Multiple Choice

The statement which explains why a firm would be interested in knowing the price elasticity of demand for a good it sells is:

• A)the price elasticity of demand can be used to determine the impact of changes in income on quantity sold.
• B)knowing the price elasticity of demand allows the firm to determine how the cost of producing additional units of the good will change.
• C)knowing the price elasticity of demand allows the firm to calculate how changes in the price of the good will affect the firm's total profit.
• D)the price elasticity of demand allows the firm to calculate how changes in the price of the good will affect the firm's total revenue.

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