Managerial Accounting (15th Edition)

Published by McGraw-Hill Education
ISBN 10: 007802563X
ISBN 13: 978-0-07802-563-1

Appendix A - Pricing Products and Services - Questions - Page 722: A-2

Answer

The price elasticity of demand measures the degree to which a change in price affects the unit sales of a product or service. Demand for a product is said to be inelastic if a change in price has little effect on the number of units sold. Demand for a product is elastic if a change in price has a substantial effect on the volume of units sold.

Work Step by Step

The price elasticity of demand measures the degree to which a change in price affects the unit sales of a product or service. Demand for a product is said to be inelastic if a change in price has little effect on the number of units sold. Demand for a product is elastic if a change in price has a substantial effect on the volume of units sold.
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