Answer the following questions using the information below:
Cox Lighting manufactures table lamps and is considering raising the price by $20 a unit for the coming year. With a $20 price increase, demand is expected to fall by 2,000 units.

-The demand for this product is:
A)greatly inelastic
B)slightly inelastic
C)elastic
D)indeterminable

Question

Answer the following questions using the information below:
Cox Lighting manufactures table lamps and is considering raising the price by $20 a unit for the coming year. With a $20 price increase, demand is expected to fall by 2,000 units.
 
-The demand for this product is:
A)greatly inelastic 
B)slightly inelastic 
C)elastic 
D)indeterminable

Quizplus · Accepted Answer

The demand for this product is elastic as a $20 increase in price leads to a fall in demand by 2,000 units. This indicates that consumers are sensitive to price changes and are likely to switch to substitutes if the price increases.

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