If a Firm Knows That the Demand for Its Product

question 20

Multiple Choice

If a firm knows that the demand for its product is inelastic,it could generate more revenue by:

• A) lowering the price, because the resulting change in sales would be relatively large.
• B) raising the price, because the resulting change in sales would be relatively large.
• C) lowering the price, because the resulting change in sales would be relatively small.
• D) raising the price, because the resulting change in sales would be relatively small.

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Definitions:

Cognitive Life

Term not well defined in psychology, possibly referring to the mental processes and activities of an individual.

Conservation

is the act of protecting natural resources and the environment to sustain biodiversity and prevent depletion.

Preoperational

A stage in Piaget's theory of cognitive development where children from ages 2 to 7 engage in symbolic play and struggle with logic and taking the perspective of others.

Decentering

The cognitive ability to consider multiple aspects of a situation or to take another person's perspective, moving beyond self-centric views.