How much do you know about price elasticity of demand and its impact on business...

• The degree to which a change in quantity demanded affects the price of a good or service
• The degree to which a change in price affects the quantity demanded of a good or service (correct)
• The degree to which a change in supply affects the price of a good or service
• The degree to which a change in demand affects the quantity supplied of a good or service

• Consumers are highly sensitive to changes in price (correct)
• Consumers are not sensitive to changes in price
• The product is a necessity
• The product is a luxury

• Businesses can set any price they want without affecting sales volume
• Businesses should only sell products with a high price elasticity of demand
• Businesses should only sell products with a low price elasticity of demand
• Businesses may need to adjust prices in order to maintain sales volume (correct)