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Questions and Answers
What does elasticity of demand measure?
What does elasticity of demand measure?
- Variation in demand between different market segments
- Responsiveness of quantity demanded to price changes (correct)
- Fluctuations in demand over time
- Total quantity demanded at a specific price level
What does the Law of Demand state?
What does the Law of Demand state?
- The quantity demanded is directly proportional to price changes
- As the price of a good increases, the quantity demanded increases
- The quantity demanded is independent of price changes
- As the price of a good increases, the quantity demanded decreases (correct)
What is the difference between movement along the demand curve and shift of the demand curve?
What is the difference between movement along the demand curve and shift of the demand curve?
- Movement along the curve is caused by changes in income, while shift is caused by changes in price
- Movement along the curve represents short-term changes, while shift represents long-term changes
- Movement along the curve represents changes in consumer preferences, while shift represents changes in production costs
- Movement along the curve is caused by changes in price, while shift is caused by changes in other factors (correct)
What is the importance of demand forecasting in business?
What is the importance of demand forecasting in business?
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What does income elasticity of demand measure?
What does income elasticity of demand measure?
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