Which of the Following Observations Is True of Price Elasticity

question 58

Multiple Choice

Which of the following observations is true of price elasticity?

• A)Price elasticity is only affected by demographic factors,not psychological factors.
• B)Price elasticity is a measure of consumers' price sensitivity.
• C)The estimation of price elasticity from historical data is an expensive approach and is not limited to the consideration of price changes.
• D)Crude estimates of price elasticity are not useful to pricing decisions.

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Definitions:

"Buy One, Get One Free"

A promotional sales technique where customers are offered an additional product at no extra cost upon purchasing the first item.

Monopolistic Competition

A market structure characterized by many sellers offering similar but not identical products, leading to competition based on product differentiation.

Purely Competitive Market

A market structure characterized by a large number of sellers offering identical products, with no single seller able to control the market price.

Product Differentiation

The process of distinguishing a product or service from others, to make it more attractive to a particular target market.