One problem in relying on price elasticity and demand curves when setting prices is that
A) the way a product or service is marketed can have a profound impact on price elasticity.
B) the underlying ideas of the demand curve and elasticity are less relevant in the modern economy.
C) only economists can properly analyze demand curves and set prices using this tool.
D) competitors can construct the same demand curves, so there is no advantage in using them.
E) marketing split from economics over the ideas of demand and elasticity.

Question

Quizplus · Accepted Answer

The way a product or service is marketed can affect consumers' perceptions of its value and therefore impact its price elasticity. For example, a luxury brand may be able to charge a higher price than a similar product from a less prestigious brand due to consumers' perceptions of the brand's exclusivity and higher quality.

One Problem in Relying on Price Elasticity and Demand Curves