Sarah is studying the demand curve for her product range. As marketing manager for Lean Cuisine frozen meals she is aware of the relationship between price and the demand for her products. It seems that even a small change in the price will greatly influence the sales demand. Lean Cuisine meals follow a price elastic demand curve which would be:
A) parallel.
B) relatively vertical.
C) relatively horizontal.
D) inverse.
E) None of the options listed.

Question

Quizplus · Accepted Answer

analyse demand to inform the development of an appropriate pricing strategy. A price elastic demand curve is relatively horizontal, showing that a small change in prices leads to a larger change in volume (see figure 8.4).

Sarah Is Studying the Demand Curve for Her Product Range