Question

Business owners are speaking about the price elasticity of demand without using the actual term Which one of the following Matements describes a good with a price elastic demand? O A With the recent economic recovery, people have more income to spend and sales are booming even at the previous prices OB. "A price won theme wont se sales and just got less money for each unit OC" don't think a price cut will make any difference to my bottom line. What I may gain from sing more I would lose on the lower price OD. "My customers are real bargain hunters. Since I set my prices just a few cents below my competitors, customers have flocked to the store and sales are booming O E TA very cold winter has increased my sales of sales and hockey socks

Answer 1

Ans) the correct option is d) My customers are real bargain hunters. Since I set my prices just a few cents below my competitors, customers have flocked to the store, and sales are booming.

When the demand is elastic, a small decrease in price leads a large increase in the quantity demanded.