If the Price Elasticity of Demand Was 4

question 235

Multiple Choice

If the price elasticity of demand was 4.0 (in absolute terms) , a 10% off sale would lead to:

• A)a 40% increase in purchases by customers.
• B)a 40% decrease in purchases by customers.
• C)a 2.5% increase in purchases by customers.
• D)a 2.5% decrease in purchases by customers.
• E)none of the above

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Definitions:

Souvenirs

Items purchased or collected as reminders of a particular place, event, or experience, often associated with tourism.

Expected Profit

An estimate of the amount of profit that a business anticipates earning over a specific period, based on forecasts and assumptions about future conditions.

Optimal Number

The best or most efficient quantity to achieve a specific goal, often relating to production, inventory levels, or workforce sizing.

Souvenirs

Items purchased or obtained as a reminder of a particular place, event, or experience.