The Elasticity of Demand Is Used to

question 36

Multiple Choice

The elasticity of demand is used to

• A) determine if consumers will or will not buy a product.
• B) measure how responsive consumers are to a change in price.
• C) determine in what direction the demand curve shifts if income changes.
• D) find the market equilibrium.
• E) determine if a change in price results in a shortage or a surplus.

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Definitions:

Sales Units

The number of units of product sold within a specific period, often used to measure sales volume and performance.

Compute Amounts

The process of calculating various financial metrics or figures, often used in accounting and finance to analyze financial statements.

FIFO

"First In, First Out," an inventory valuation method where goods first added to inventory are the first ones to be sold.

LIFO

Last-In, First-Out, an inventory valuation method where the most recently produced items are sold first.