Producers want to calculate the price elasticity of demand because they want to:
A) know the goods and services for which consumers are most sensitive to price changes.
B) be able to predict the future preferences of their customers.
C) know that consumers will have the same response to a price change regardless of the good or service.
D) understand what goods their customers dislike the most.

Question

Quizplus · Accepted Answer

Producers want to calculate price elasticity of demand to understand how much a change in price will affect the quantity demanded of their goods or services. By knowing the price elasticity, they can determine the goods and services for which consumers are most sensitive to price changes and adjust their prices accordingly. This helps them to maximize their profits and make informed decisions about pricing strategies.

Producers Want to Calculate the Price Elasticity of Demand Because