What Could a Firm Do If It Wanted to Know

question 113

Multiple Choice

What could a firm do if it wanted to know whether the demand for its product was elastic,unit-elastic,or inelastic?

• A) Survey competitors and ask them what they think demand elasticity is for the product.
• B) Talk to its customers.
• C) Change price a little bit and observe what happens to total revenue.
• D) Don't do anything as there is no way to find an elasticity value.

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Definitions:

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, transforming economies from agrarian to industrial.

Economic System

An economic system is the structured way a society allocates resources, distributes goods and services, and facilitates production and consumption patterns among its population.

Capitalism

An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Anomie

A condition of instability resulting from a breakdown of standards and values or from a lack of purpose or ideals within a society.