Business people speak about price elasticity of demand without using the actual term. Which one of the following statements reflects elastic demand for a good?
A)"A price cut won't help me. It won't increase sales, and I'll just get less money for each unit."
B)"I don't think a price cut will make any difference to my bottom line. What I may gain from selling more I would lose on the lower price."
C)"My customers are real bargain hunters. Since I set my prices just a few cents below my competitors, customers have flocked to the store, and sales are booming."
D)"With the recent economic recovery, people have more income to spend and sales are booming, even at the previous prices."
E)"A very cold winter has increased my sales of skates and hockey sticks."

Question

Quizplus · Accepted Answer

Elastic demand is when a small change in price leads to a significant change in the quantity demanded. Statement C reflects this as a slight price reduction below competitors has led to a significant increase in sales.

Business People Speak About Price Elasticity of Demand Without Using