During the Height of the Pet Rock Craze in the 1970s

question 18

Multiple Choice

During the height of the pet rock craze in the 1970s, the price elasticity of demand was estimated to be 1.20.Since pet rocks have a marginal cost of zero, a profit-maximizing seller of pet rocks would

• A)increase prices.
• B)decrease prices.
• C)leave prices unchanged.
• D)need more-detailed market information before making any pricing changes.
• E)diversify into selling Karen Carpenter LPs.

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Definitions:

Major Subassemblies

Large, complex components that are assembled separately before being integrated into the final product.

Product Options

Various models, variations, or features that a customer can choose when purchasing a product.

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Enterprise Resource Planning systems are integrated management software platforms that help organizations automate and manage core business processes for optimal performance.

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A continuous operation or sequence of actions that proceed without interruption in a repeated cycle.