Compared with Generic Products,a Brand Name

question 80

Multiple Choice

Compared with generic products,a brand name:

• A)reduces the price elasticity of demand and gives the firm more market power.
• B)increases the price elasticity of demand and gives the firm more market power.
• C)increases the price elasticity of demand and gives the firm less market power.
• D)reduces the price elasticity of demand and gives the firm less market power.
• E)has no effect on price elasticity of demand or market power.

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Definitions:

Elastic

A characteristic of a good or service with demand or supply that is responsive to changes in price, typically resulting in significant quantity changes when prices vary.

Inelastic

Describes a situation in which the demand for a good or service is relatively unresponsive to changes in price.

Total-revenue Curve

A graphical representation that shows how a company's total revenue changes in response to changes in the quantity of goods or services sold.

Linear Demand Curve

A representation of the relationship between the price of a good and the quantity demanded, characterized by a constant slope, indicating a steady change in demand relative to price.