Suppose a 10% Increase in the Price of Pain Relievers

question 126

Multiple Choice

Suppose a 10% increase in the price of pain relievers leads to a 5% decrease in quantity demanded of pain relievers.The demand for pain relievers,with respect to price,is:

• A)elastic.
• B)inelastic.
• C)unitary elastic.
• D)perfectly inelastic.

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Definitions:

Industry

A broad term referring to the production of goods or services within an economy that are related by their principal business activities.

Firm

An organization that produces goods or services in order to generate profit, typically within an economic system.

Third-Degree Price Discrimination

A pricing strategy where different groups of consumers are charged different prices based on attributes like age, location, or income, aiming to maximize profits by exploiting varying demand elasticities.

Inelastic Demand Functions

Demand functions that represent situations where the quantity demanded of a good or service changes very little in response to changes in its price.