Price Elasticity of Demand Is More Likely to Be Greater

question 76

Multiple Choice

Price elasticity of demand is more likely to be greater than one if:

• A)consumers have a long time to adjust to a price change.
• B)the product is a necessity.
• C)demand is inelastic.
• D)there are few close substitutes for the product.
• E)total revenue declines in response to a price reduction.

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Definitions:

Sales of Ice Cream

The total revenue or quantity sold of ice cream over a specified period of time.

Sales of Soda

The commercial activities related to the buying and selling of carbonated soft drinks.

Correlation

The measure of the relationship between two variables or sets of data.

Outdoor Temperature

The temperature of the air outside, which can be influenced by various weather conditions and time of day.