What does the "price elasticity of demand" measure? What does a price elasticity of demand coefficient of 1.2 mean? Does the product have an elastic, unitary elastic or inelastic demand?
The price elasticity of demand measures buyer responsiveness to a price change. If the price elasticity of demand coefficient equals 1.2, this means that for every 1 percent change in price there will be a 1.2 percent change in the quantity demanded in the opposite direction. This implies that consumers are relatively responsive to a change in the price and therefore the demand for this product is elastic.
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Product differentiation refers to:
A. firms who offer similar products to their competitors' products, but that are more attractive in some way. B. the process of creating a standardized product with a lower-cost method than the competitors' method. C. the process of informing the public of differences in products as a result of error. D. consumers who sort and group goods based on similar characteristics.
Inflation is measured by an increase in:
a. homes, autos and basic resources. b. prices of all products in the economy. c. the consumer price index (CPI). d. None of the answers are correct.
An efficient clinic
A. will have higher costs than other clinics with similar quality of care. B. will have lower quality than other clinics with similar costs. C. will have higher margins than an inefficient competitor. D. will produce substandard care.
Deregulation includes reducing governmental control over some aspects of private industry, while increasing control of others.
Answer the following statement true (T) or false (F)