Which of the Following Statements About Price Elasticity of Demand

question 205

Multiple Choice

Which of the following statements about price elasticity of demand most accurate?

• A) The more substitutes a product has, the more likely it is to be price elastic.
• B) Price elasticity with inelastic demand must always be greater than 1.
• C) Unitary demand represents the relationship between the cash outlay necessary to purchase a product relative to a person's disposable income.
• D) With inelastic demand, reducing price will result in an increase of total revenue.
• E) With inelastic demand, reducing price will result in an increase in total revenue, although not necessarily an increase in profit.

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