Which of the Following Statements About Price Elasticity Is False

question 116

Multiple Choice

Which of the following statements about price elasticity is false?

• A)Steak is an example of a product that has an elastic demand for most people, because when price goes up quantity demanded goes down proportionally more.
• B)Elasticity of demand is the relative responsiveness of a change in quantity demanded to changes in price.
• C)If marketers can determine price elasticity, then setting prices at optimum levels is much easier.
• D)When price is raised on a product that has an inelastic demand, then total revenue will decrease.
• E)A product like electricity has an inelastic demand.

Analyze the effect of taxes on market equilibrium and how they impact quantities sold.

Calculate effects of subsidies on market prices to achieve a new market equilibrium.

Understand the relationship between supply and demand functions.

Calculate equilibrium quantities given changes in supply and demand.

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Definitions:

Continuous Reinforcement

A method of learning that involves providing a reward after every correct response to ensure the behavior is reinforced.

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.

Discriminative Stimulus

A type of stimulus in the environment that increases the chance of a response due to its association with a reinforcement or punishment.

Operant Response

A behavior that is modified by its consequences, which can lead to changes in future behavioral patterns.