Podcast
Questions and Answers
What is the relationship between volume and price change elasticity?
What is the relationship between volume and price change elasticity?
- Volume changes inversely with price change elasticity (correct)
- Volume changes randomly with price change elasticity
- Volume changes proportionally with price change elasticity
- Volume changes directly with price change elasticity
In which type of market do small price changes have a large impact on the quantity sold?
In which type of market do small price changes have a large impact on the quantity sold?
- Elastic markets (correct)
- Unstable markets
- Inelastic markets
- Stable markets
What is the primary implication of a predicted improvement in profitability due to a price reduction?
What is the primary implication of a predicted improvement in profitability due to a price reduction?
- Price reduction will reduce consumer demand
- Price reduction is likely to be beneficial (correct)
- Price reduction will lead to bankruptcy
- Price reduction will increase market share
What is the importance of volume hurdles in pricing decisions?
What is the importance of volume hurdles in pricing decisions?
Why are fixed costs considered irrelevant for marginal price change decisions?
Why are fixed costs considered irrelevant for marginal price change decisions?
What does the term 'elasticity of demand' measure?
What does the term 'elasticity of demand' measure?
What does a high elasticity of demand imply?
What does a high elasticity of demand imply?
In inelastic markets, what happens when there is a large change in price?
In inelastic markets, what happens when there is a large change in price?
What do inelastic markets favor to improve profitability?
What do inelastic markets favor to improve profitability?
Why is brand-level switching easier than category-level switching for consumers?
Why is brand-level switching easier than category-level switching for consumers?
What does it mean if the elasticity of demand at the category level is less than that at the brand level?
What does it mean if the elasticity of demand at the category level is less than that at the brand level?
What happens when there is a small elasticity of demand in response to a price increase?
What happens when there is a small elasticity of demand in response to a price increase?
In an elastic market, a price increase would likely result in:
In an elastic market, a price increase would likely result in:
Which statement about inelastic markets is true?
Which statement about inelastic markets is true?
If a firm cuts prices below the optimal price, it is likely to:
If a firm cuts prices below the optimal price, it is likely to:
What is a primary challenge in using economic price optimization (EPO) models?
What is a primary challenge in using economic price optimization (EPO) models?
If a firm raises prices above the optimal price, it is likely to:
If a firm raises prices above the optimal price, it is likely to:
