A Firm with a Highly Elastic Demand for Its Products

question 74

Multiple Choice

A firm with a highly elastic demand for its products

• A)will be unable to pass increased costs following unfavorable changes in the exchange rate without significantly lowering the quantity sold.
• B)will be able to raise prices following unfavorable changes in the exchange rate without significantly lowering the quantity sold.
• C)can easily pass increased costs on to consumers.
• D)will sell about the same amount of product regardless of price.

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Definitions:

Breach Of Warranty

Occurs when a product or service fails to meet the terms or conditions explicitly or implicitly stated in a warranty agreement.

Material

Pertaining to or consisting of physical substances, or in legal contexts, information of such significance that it could influence a decision.

Insurer's Risk

The risk borne by an insurance company, being the potential financial loss they accept when providing policies to insureds.

Liability Insurance

A type of insurance coverage that protects an individual or entity from the risk of being held legally liable for injuries or damages to others.