If the Price Elasticity of Demand for a Product Is

question 248

Multiple Choice

If the price elasticity of demand for a product is 2 in absolute value, and the price elasticity of supply for the same product is 1, what is the predicted percent change in price from a 5 percent fall in the supply?

• A) a 1.67 percent fall in price
• B) a 1.67 percent rise in price
• C) a 0.6 percent fall in price
• D) a 0.6 percent rise in price

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Definitions:

Discount Prices

Lower than the standard price, often used as a promotional strategy to increase sales or clear out inventory.

Omnichannel Strategy

Involves integrating multiple methods of shopping available to consumers, such as online, in-store, and through mobile apps, to provide a seamless customer experience.

Multichannel Strategy

A marketing approach that combines various communication channels, such as retail stores, online, and mobile apps, to provide a seamless customer experience and broaden market reach.

Supercenters

Large retail stores that combine a supermarket and a department store, offering a wide range of products including groceries, clothing, and household goods under one roof.