Business people often speak about price elasticity without actually using the term. Which statement describes a good with an elastic demand?
A) "A price cut won't help me. It won't increase my sales, and I'll just get less money for each unit."
B) "I don't think a price cut will help my bottom line any. Sure, I'll sell a bit more, but I'll more than lose because the price will be lower."
C) "My customers are real shoppers. After I cut my prices just a few cents below those my competitors charge, customers have been flocking to my store and sales are booming."
D) "The economic expansion has done wonders for my sales. With more people back at work, my sales are taking off!"

Question

Quizplus · Accepted Answer

An elastic demand means that a small change in price leads to a large change in quantity demanded. Statement C describes this situation, where a small price cut leads to a significant increase in sales.

Business People Often Speak About Price Elasticity Without Actually Using