If the firm offers a discount of 5% and as a result of this discount it ends up
ID: 1176587 • Letter: I
Question
If the firm offers a discount of 5% and as a result of this discount it ends up selling 20% of its output, what can be concluded about the elasticity of demand
The firm operates in the inelastic range of the demand and the magnitude of the elasticity is 4
The firm opearates in the elastic range of the demand and the magnitude of the elasticity is 4
The firm opearates in the inelastic range of the demand and the magnitude of the elasticity is 0.25
The firm operates in the elastic range of the demand and the magnitude of the elasticity is 0.25
The firm operates in the inelastic range of the demand and the magnitude of the elasticity is 4
The firm opearates in the elastic range of the demand and the magnitude of the elasticity is 4
The firm opearates in the inelastic range of the demand and the magnitude of the elasticity is 0.25
The firm operates in the elastic range of the demand and the magnitude of the elasticity is 0.25
Explanation / Answer
The firm opearates in the elastic range of the demand and the magnitude of the elasticity is 4