If the Demand for a Product Is Price Inelastic

question 79

Multiple Choice

If the demand for a product is price inelastic,

• A)producers' revenues will increase if supply increases
• B)producers' revenues will increase if supply decreases
• C)a small change in price will cause a large shift in the demand curve
• D)a large change in price will cause a small shift in the demand curve
• E)a small change in price will cause a small shift in the demand curve

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Definitions:

High Set-up Costs

Initial investments or expenses that are necessary to start a business or manufacturing process, which can act as a barrier to entry for new firms.

Industry

A sector of the economy that produces a specific type of goods or services, characterized by shared production processes or products.

Exclusive Right

A legal provision or agreement granting someone the sole authority to use, sell, or license a product, service, or intellectual property.

Military-industrial Complex

The network of government agencies, armed forces, and private industries involved in the production and supply of military materials and technology.