Asked by Amanda Palazzo on May 10, 2024
Verified
If the price of the product falls by five percent and the volume of sales increases by eight percent, the demand for the product is ______.
A) price elastic
B) price inelastic
C) price volatile
D) price subjective
Price Elastic
Refers to how sensitive the demand for a good is to changes in its price.
Volume Of Sales
The total quantity of goods or services sold within a specific time frame.
Price Falls
A situation where the price of goods or services decreases in the market due to various factors like excess supply, reduced demand, or external economic conditions.
- Comprehend the principle of price elasticity and inelasticity, along with the elements affecting them.
Verified Answer
MI
M Idriss RashidiMay 11, 2024
Final Answer :
A
Explanation :
The demand for a product is considered price elastic if the percentage change in quantity demanded is greater than the percentage change in price, indicating that consumers are responsive to price changes. In this case, an 8% increase in sales volume in response to a 5% decrease in price indicates price elasticity.
Learning Objectives
- Comprehend the principle of price elasticity and inelasticity, along with the elements affecting them.
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