Costs are a major factor:
A)when demand is price-inelastic
B)when demand is price-elastic
C)when the opportunity for price discrimination exists
D)for peak-load pricing

Question

Quizplus · Accepted Answer

When demand is price-elastic, costs become a major factor because any increase in price may lead to a significant decrease in demand. In such a scenario, businesses need to carefully consider their costs to ensure that the price set is not too high and does not adversely affect demand. On the other hand, when demand is price-inelastic, consumers are willing to pay more, and costs may not be as significant a factor in setting prices. The other choices (A, C, and D) are also situations where costs may be a factor, but they do not necessarily apply in all cases.

Costs Are a Major Factor