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If a Firm Is Facing Elastic Demand, Then the Firm

question 60

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If a firm is facing elastic demand, then the firm should decrease price to increase revenue.


Definitions:

Habituation

The process by which an organism decreases or ceases its responses to a repetitive stimulus over time, indicating a basic form of learning.

Sensitization

An increase in behavioral response after exposure to a stimulus, often as a result of an enhanced reaction to a subsequent stimulus.

Habituation

A decrease in response to a stimulus after repeated exposure to it, representing a fundamental form of learning.

Sensitization

An increased reaction to a stimulus following repeated exposure, often used in the context of drug tolerance or allergic reactions.

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