Managers of firms with market power prefer a price elasticity of demand equal to compared to______ .

Question

Quizplus · Accepted Answer

Managers of firms with market power prefer a low price elasticity of demand, which means that a change in price will result in a relatively small change in the quantity demanded. A price elasticity of demand of 1.2 and 1.3 indicate that the change in quantity demanded will be relatively small, making them the preferred choices.

Managers of Firms with Market Power Prefer a Price Elasticity