What forces prices down ?
Correct answer: B. Elastic demand
- A. Large consumer purchasing power
- B. Elastic demand
- C. Inelastic demand
- D. Inferior products
Explanation
With elastic demand, consumers respond strongly to price changes, so sellers may need to reduce prices to attract buyers or increase total revenue. Large purchasing power generally raises demand and prices, while inelastic demand does not itself force prices down.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
The circular nature of the economic process occurs from_________________?
Poverty is related to_______________?
Most researchers today use only two approaches to determine social class They are the_______________?
Criticisms of structural functionalism include_______________?
The classical conservative approach to stratification is that____________?
Stratification occurs societies that have a____________?