question
price elastic
answer
if demand for a product is elastic then a decrease in price is likely to lead to a relatively larger increase in quantity demanded
question
what is the correlation between price and revenue when the demand for a product is elastic?
answer
- when price goes up, revenue goes down
- when price goes down, revenue goes up
question
price inelastic
answer
if demand for a good is price inelastic then a change in price will bring about relatively smaller changes in sales
question
what is the correlation between price and revenue when the demand for a product is inelastic?
answer
- when price goes up, revenue goes up
- when price goes down, revenue goes down
question
what determines price elasticity of demand?
answer
1. the availability of close substitutes
2. the degree of differentiation
3. branding and brand loyalty
4. actual or perceived necessity
5. the level of addiction
6. the relative expense of the product
2. the degree of differentiation
3. branding and brand loyalty
4. actual or perceived necessity
5. the level of addiction
6. the relative expense of the product
question
what is the formula for price elasticity of demand
answer
% change in quantity demanded / % change in price
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
