If the Short Run Elasticity of Demand for Widgets Is

question 165

Multiple Choice

If the short run elasticity of demand for widgets is 1.1 and the long run elasticity of demand for widgets is 3.6, an increase in price will ____ total revenue in the short run and ____ total revenue in the long run.

• A)​Increase; increase.
• B)​Increase; decrease.
• C)​Decrease; increase.
• D)​Decrease; decrease.

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Definitions:

Investment

The allocation of resources, usually money, in the expectation of generating an income or profit.

Differentiation Strategy

A marketing approach where a business seeks to distinguish its products or services from competitors' through unique attributes.

Exclusivity

A business strategy or condition where products or services are restricted to a specific group or area, often to maintain high prices or prestige.

Quality Focus

A business strategy emphasizing the importance of maintaining high standards in product or service offerings to meet customer satisfaction.