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Author Question: Many products are in the maturity stage of the product life cycle. Indicate whether the statement ... (Read 162 times)

nenivikky

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on: Jun 29, 2018
Many products are in the maturity stage of the product life cycle.
 
 Indicate whether the statement is true or false

Question 2

Explain what is meant by price elasticity of demand.


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durant1234

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Reply #1 on: Jun 29, 2018
Answer to Question 1

True

Answer to Question 2

Price elasticity of demand provides a measure of the sensitivity of consumer demand for a product or product category to changes in price. Elasticity is formally defined as the percentage change in quantity demanded relative to a given percentage change in price. For a product with highly elastic demand, a relatively small increase in price results in a huge change in quantity sold. Non-essential items or those with ready substitutes tend to have more elastic demand. If marketers can determine the price elasticity of demand for a product, setting a price is easier. By analyzing total revenues as prices change, marketers can determine whether a product is price elastic. Total revenue is price multiplied by quantity. If demand is elastic, a shift in price causes an opposite change in total revenue: An increase in price will decrease total revenue, and a decrease in price will increase total revenue. The following formula determines the price elasticity of demand: price elasticity of demand =  change in quantity demanded/  change in price.


nenivikky

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Reply 2 on: Jun 29, 2018
YES! Correct, THANKS for helping me on my review

chereeb

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Reply 3 on: Yesterday
Excellent

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