When Demand for a Product Is Very Elastic and Prices

question 33

Multiple Choice

When demand for a product is very elastic and prices are increased, demand will ________.

• A) remain the same, and operating profits will increase
• B) remain the same, and operating profits may either increase or decrease
• C) decrease, and operating profits will decrease
• D) decrease, and operating profits may either increase or decrease

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Definitions:

Bank

A financial institution licensed to receive deposits, offer loans, and provide various financial services to individuals and businesses.

Buyer Power

The influence that customers have over a producing industry, often determining the market value and ensuring that services and products meet their needs.

Buyers

Individuals or entities that purchase goods or services for personal use or organizational needs.

Choices

The range of different options or decisions from which an individual can select or make a decision.