One Problem in Relying on Price Elasticity and Demand Curves

question 32

Multiple Choice

One problem in relying on price elasticity and demand curves when setting prices is

• A) the way a product or service is marketed can have a profound impact on price elasticity.
• B) the underlying ideas of the demand curve and elasticity are less relevant in the modern economy.
• C) only economists can properly analyze demand curves and set prices using this tool.
• D) competitors can construct the same demand curves, so there is no advantage in using them.
• E) marketing split from economics over the ideas of demand and elasticity.

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Definitions:

Prime Mover

The initial mechanical source of motive power. In the context of a hydraulic circuit, the means used to drive the hydraulic pump would be properly the prime mover, although the term is sometimes used to describe the pump itself.

Hydraulic

Hydraulic systems use pressurized fluid to power devices or machinery, transferring energy through the controlled movement and pressure of a liquid, typically oil or water.

Mechanical Force

A push or pull action resulting from the interaction of physical objects, which can cause an object to move, stop, or change direction.

Torque Converter

A type of fluid coupling that allows the engine to spin somewhat independently of the transmission, used in automatic transmissions to improve smoothness.