If the Demand for Insulin Is Inelastic,an Increase in Insulin

question 242

Multiple Choice

If the demand for insulin is inelastic,an increase in insulin prices leads to

• A) less total revenue for insulin makers.
• B) more total revenue for insulin makers.
• C) no change in total revenue for insulin makers.
• D) first a decrease, then an increase in total revenue for insulin makers.
• E) Total revenue probably changes, but we need more information about the change in total expenditures on insulin to determine if the total revenue rises, falls, or stays the same.

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Definitions:

Product Life Cycle

Describes the stages a product goes through from when it is first introduced into the market until it declines or is removed from the market; the stages include introduction, growth, maturity, and decline.

Promotional Mix

The blend of different marketing strategies and tactics – such as advertising, public relations, personal selling, and sales promotion – used to reach the target audience, create awareness, and generate sales or achieve marketing objectives.

Decline

A phase in the product life cycle or market trend where sales or interest starts decreasing over time.

Product Characteristics

Attributes or features that define a product and differentiate it from competitors, including quality, functionality, and design.