A Union Argues That a Price Cut Will Boost the Revenues

question 39

Multiple Choice

A union argues that a price cut will boost the revenues of the firm, while management argues that the opposite is true. This suggests that the price elasticity of demand is

• A) unit-elastic from the union's perspective and unit-inelastic from management's perspective.
• B) perfectly inelastic from the union's perspective and perfectly elastic from management's perspective.
• C) elastic from the union's perspective, inelastic from management's perspective.
• D) inelastic from the union's perspective, elastic from management's perspective.

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Definitions:

Manufacturer

A company or individual that makes goods for sale, typically involving large-scale production using machinery.

Marketing Channel

Pathways or routes through which goods and services travel from the producer or manufacturer to the end consumer, possibly including intermediaries.

Product

An item or service created through a process and available for exchange or sale to satisfy a need or want.

Service

An intangible commodity that involves providing labor, support, or a facility for a fee, where the benefit is realized without the need to own a physical product.