Holding All Other Things Constant, If the Price Elasticity of Demand

question 70

Multiple Choice

Holding all other things constant, if the price elasticity of demand increases (i.e., becomes more negative) , then the markup under the economists' approach to pricing will:

• A)increase.
• B)decrease.
• C)remain the same.
• D)The effect cannot be determined.

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Definitions:

Bored

A state of feeling disinterested, restless, or unengaged due to a lack of stimulation or interest in the current activity or surroundings.

Habituated

The process by which an individual becomes accustomed to a stimulus or environment over time, leading to a decrease in responsiveness.

Yerkes-Dodson Law

A psychological principle that asserts there is an optimal level of arousal for the best performance of a task: too little arousal can lead to underperformance, while too much can lead to mistakes.

Simple Tasks

Activities or tasks that require a minimal amount of cognitive or physical effort to complete.