The Price Elasticity of Demand Is Important to Firms Because

question 106

Multiple Choice

The price elasticity of demand is important to firms because

• A)it explains the relationship between income and demand for the goods they sell
• B)it shows how price changes affect total expenditures on the goods they sell
• C)the law of demand suggests that elasticity falls as total expenditures continuously rises
• D)it helps identify the equilibrium price and quantity in the market
• E)it relates price to supply

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Definitions:

Demographics

Statistical data relating to the population and particular groups within it, such as age, gender, income, and education.

Marketing Opportunities

Situations or conditions favorable for reaching specific marketing objectives or introducing new products or services.

Demographic Trends

Patterns and changes in population characteristics over time, such as age, gender, and ethnicity.

Self-Concept Attachment

The degree to which a consumer identifies with a product or brand as a reflection of their own identity or personal values.