Explain price elasticity. What determines the elasticity of demand?
What will be an ideal response?
Price elasticity refers to a measure of the sensitivity of demand to changes in price. If demand hardly changes with a small change in price, the demand is inelastic. If demand changes greatly, it is elastic.
If demand is elastic rather than inelastic, sellers will consider lowering their prices. A lower price will produce more total revenue. This practice makes sense as long as the extra costs of producing and selling more do not exceed the extra revenue. At the same time, most firms want to avoid pricing that turns their products into commodities. In recent years, forces such as deregulation and the instant price comparisons afforded by the Internet and other technologies have increased consumer price sensitivity, turning products ranging from telephones and computers to new automobiles into commodities in some consumers' eyes.
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What are the three categories of business-to-business purchase decisions? Define each one
What will be an ideal response?
The higher the rate of customer retention, the longer the average customer life expectancy and the greater the customer lifetime value
Indicate whether the statement is true or false
A ________ is when one party in a financial contract has incentives to act in its own interest rather than in the interests of the other party
A) moral hazard B) risk C) conflict of interest D) financial panic
Which of the following is a micro-blogging social network site that allows users to send and receive 140-character messages?
A) Facebook B) Twitter C) Pinterest D) Instagram