Question 35
POST_UTME_IGBINEDION_UNIVERSITY
•
2018
•
ECONOMICS
•
objective
A firm is considering the introduction of a new product. U\sing the concept of elasticity of demand, explain why the firm might choose to price the product at a level that is less elastic than the demand for its existing products.
Answer Options
Correct Answer
A.
The firm can use the concept of elasticity of demand to justify pricing the product at a level that is less elastic than the demand for its existing products as a means of increa\sing revenue and market share.
B.
The firm can use the concept of elasticity of demand to justify pricing the product at a level that is less elastic than the demand for its existing products as a means of reducing competition and increa\sing profit margins.
C.
The firm can use the concept of elasticity of demand to justify pricing the product at a level that is less elastic than the demand for its existing products as a means of improving customer satisfaction and loyalty.
D.
The firm can use the concept of elasticity of demand to justify pricing the product at a level that is less elastic than the demand for its existing products as a means of increa\sing the product's perceived value and premium pricing.
Correct Answer
A
Correct Option:
The firm can use the concept of elasticity of demand to justify pricing the product at a level that is less elastic than the demand for its existing products as a means of increa\sing revenue and market share.
About This Question
This is
Post Utme Igbinedion University
2018
Economics
Question 35.
It is one of the
objective
questions from the
2018
Post Utme Igbinedion University
Economics
examination.