The More Elastic Is the Demand for a Product

question 47

Multiple Choice

The more elastic is the demand for a product:

• A) the greater the difference between marginal revenue and price.
• B) the closer is marginal revenue to the price.
• C) the more a firm must reduce its price to increase its sales.
• D) the less a firm must increase its sales to reduce the price.

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Definitions:

Factor Ratings

A method used to evaluate various factors in decision-making processes by assigning them scores based on their importance.

Fixed Costs

Costs that do not change with the level of output or production, remaining constant over a specific period.

Variable Costs

Costs that change in proportion to the level of goods or services produced.

Sales Volume

The quantity of products or services sold by a company during a certain period of time.