38. Demand for a product will be inelastic if a. its price is so low that it is

Question

38. Demand for a product will be inelastic if a. its price is so low that it is an inconsequential part of an individual's budget. b. the product has a number of different uses c. many substitute products are available in the market. d. the product can be repaired and replaced or prolonged in its use. 39. Identify a true statement about yield management systems. a. They determine the availability of product substitutes in industries that are experiencing rapid change. b. They use a software that employs techniques such as discounting early purchases and limiting early sales at these discounted prices. c. They predict necessary service levels required to achieve revenue goals. d. They determine whether it is financially more feasible to buy a new product or repair a broken one. 40. Which of the following statements is true about yield management systems (YMS)? a. They are used to eliminate the problem of simultaneous production and consumption from services. b. They are used only in service industries. c. They are complex pricing systems used to establish price equilibrium. d. They are used to make profitable use of the unused capacity of perishable goods. 41 A cost that changes with the level of output is called a(n)-- a. liquid cost b. variable cost c. independent cost d. indirect cost

Explanation / Answer

The correct option is a) its price is so low that it is an inconsequential part of an individual budget, because, If a small change in price results in large changes in the quantity demanded, then demand is considered elastic.

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