Which of the following observations is true about price elasticity?
A) It is significantly affected by both governmental and environmental factors.
B) The historical data-based price elasticity measurement approach is limited to the considerations of price changes.
C) Estimates of price elasticity are useful for pricing decisions, provided those estimates are accurate.
D) Price elasticity can be estimated accurately from sociological data.

Question

Quizplus · Accepted Answer

Both demographic and psychological factors affect price elasticity. Price elasticity can be estimated from historical data or from price/quantity data across different sales districts. This approach is limited to the consideration of price changes. Even a crude estimate of price elasticity is a useful input to pricing decisions.

Which of the Following Observations Is True About Price Elasticity