Compared with generic products,a brand name:
A)reduces the price elasticity of demand and gives the firm more market power.
B)increases the price elasticity of demand and gives the firm more market power.
C)increases the price elasticity of demand and gives the firm less market power.
D)reduces the price elasticity of demand and gives the firm less market power.
E)has no effect on price elasticity of demand or market power.

Question

Quizplus · Accepted Answer

Brand names often reduce the price elasticity of demand because consumers perceive them as having higher quality or value, allowing firms to have more market power and charge higher prices without losing many customers.

Compared with Generic Products,a Brand Name