When a Firm Produces a Good or Service That Has

question 45

Multiple Choice

When a firm produces a good or service that has an elastic demand it will:

• A) be less able to increase price without losing customers
• B) be more able to increase price without losing customers
• C) decrease sales and revenue by lowering price
• D) be able to change price without any effect on sales and revenue
• E) increase the quantity demanded by increasing the price

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Definitions:

Expensive-To-Reach

Describes a target market segment that is costly to access, often due to geographic, demographic, or psychographic barriers.

Sales Potential

The estimated maximum total sales revenue of a product or service in a specific market over a set period.

EBIAT

Earnings Before Interest After Taxes, a measure of a company's profitability that excludes interest expenses but includes taxes.

Amortization

The process of spreading out a loan into a series of fixed payments over time, accounting for both principal and interest.