Information on the price elasticity of demand is particularly important to managerial decision making because:
A) the higher the price elasticity of demand for a product is, the more profitable it will be to produce more of it.
B) depending on the elasticity coefficient, decision makers will immediately know if a price change will cause profits to increase or decrease.
C) it allows one to predict how total revenue will respond, i.e., increase or decrease, to a change in price.
D) as the price elasticity coefficient approaches one, profits will increase.
C
You might also like to view...
When the exchange rate between the U.S. dollar and the euro changes from 1.00 euro per dollar to 1.30 euros per dollar, then the
A) euro has depreciated against the euro. B) U.S. dollar has depreciated against the euro. C) U.S. dollar has depreciated against the dollar. D) euro has appreciated against the dollar. E) U.S. dollar has appreciated against the euro.
Which of the following statements best describes possibilities for trade?
a. Many larger national economies around the world, in regions like North America and Western Europe, have much more limited possibilities for trade inside their countries or their immediate regions. b. Many smaller national economies around the world, in regions like Latin America, Africa, the Middle East, and Asia, have much more limited possibilities for trade inside their countries or their immediate regions. c. Many medium national economies around the world, in regions like Latin America, Africa, the Middle East, and Asia, have much more limited possibilities for trade inside their countries or their immediate regions. d. Many smaller national economies around the world, in regions like Eastern Europe, have much more limited possibilities for trade inside their countries or their immediate regions.
Special interest group K receives a 1/100th slice of the economic pie. Its net benefit from either an economic growth policy or a transfer policy is $200,000. In order for group K to be indifferent between the two policies, the economic growth policy would have to make the size of the economic pie (Real GDP) grow by _________________. This type of analysis is used to show that special interest
groups tend to press government for ______________ instead of ________________. A) $20,000,000; economic growth; transfers B) $2,000,000; transfers; economic growth C) $20,000,000; transfers; economic growth D) $20,000,000; transfers; economic growth E) none of the above
The CPI is based on an:
A. aggregated average meant to reflect the statistical average consumption. B. average of the goods and services purchased by "urban consumers." C. average of the goods and services purchased by "rural consumers." D. average of the two baskets of goods and services purchased both by "urban" and by "rural" consumers.