If a Large Percentage Change in Price Leads to a Smaller

question 29

Multiple Choice

If a large percentage change in price leads to a smaller percentage change in quantity demanded,the result is a:

• A) very elastic demand.
• B) less elastic demand.
• C) low magnitude of response.
• D) high magnitude of response.

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Definitions:

Competitive Price-Searcher Markets

Markets where firms have some power to set prices due to differentiated products but still face competition and must search for competitive pricing strategies.

Purely Competitive Markets

Markets characterized by many buyers and sellers, homogeneous products, and no single participant having market control.

Government Action

Measures or initiatives undertaken by the governmental bodies to address societal, economic, or international issues.

Large Profit

A significantly high net income resulting from the difference between revenue and expenses.