ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Consumer spending decreased in the recession of 2009-10. A firm tried to keep revenue high by giving discounts to encourage demand. It measured the price elasticity of demand (PED) for its own product and the cross elasticity of demand (XED) with its competitors’ products.When might such promotions achieve the result the company hoped?
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when PED is greater than one and XED is positive
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when PED is less than one and XED is negative
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when PED is less than one and XED is positive
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when PED is unity and XED is negative
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Explanation:
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