At the pricing planning meeting, the Marketing Director told all the people working on revising the product prices to remember that the demand for the product was very elastic. So how des this effect pricing? Asked John. What would John be told?
a. For our product, customer demand will be very responsive to price changes. A modest price increase could result in a considerable decline in demand.
b. It does not affect price however, customer will want to pay by credit card.
c. If the company raises the product price, the demand for the product will not change
d. The company will have very little control in determine the price
The correct answer is A.
The definition of a 'very elastic' demand is that the quantity demanded ...
This job explains 'very elastic' demand.