If Seagram's marketers found that the firm's Crown Royal bourbon was a prestige product and raised its price, which of the following would most likely happen?
A)The quantity demanded would immediately fall.
B)The quantity demanded would always increase.
C)Above some price level, the quantity demanded would begin to decrease.
D)The demand curve for the product would always shift to the right.
E)The demand curve for the product would always shift to the left.

Question

Quizplus · Accepted Answer

As Crown Royal is a prestige product, its demand is likely to be elastic, meaning that as the price increases, the quantity demanded will begin to decrease. Therefore, above some price level, the quantity demanded would be expected to begin to decrease.

If Seagram's Marketers Found That the Firm's Crown Royal Bourbon