Question: This is from a web resource (CHRON) explaining Economics to business students, Price elasticity of demand affects a business's ability to increase the price of

  1. This is from a web resource (CHRON) explaining Economics to business students, "Price elasticity of demand affects a business's ability to increase the price of a product. Elastic goods are more sensitive to increases in price, while inelastic goods are less sensitive. Assuming that there are no costs in producing the product, businesses would simply increase the price of a product until demand falls."

There is some serious mistake in the last sentence of this explanation. What is it? Explain in short.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

This is from a web resource (CHRON) explaining Economics to business students, "Price elasticity of demand affects a business's ability to increase the price of a product. Elastic goods are more...

Q:

4 Files 12:47 PM Mon May 16 Insert Draw Layout Review View Unit 3Microec0nomics Name: ELASTICITY Use the space below to take notes during class. Elastic: Unit Elastic: Inelastic: Perfect...

Q:

80 10 X08 Priority: MBA 644 Managerial Economics Final Exam CH 8-13 Spr 24 Brennan 10000 -urey 18) The suggestion that a seller will try to set price based on "what the market will bear" is explicit...

Q:

.detailed answers only! True/False (1 point each) 1. A laissez faire economy will always result in economic efficiency. 2. Business sell to households in the resource markets, but households sell to...

Q:

Answer the MCQs and Theory (Theory must be own words, that's can be five or more sentence in every theory question): The classical problem of economics is? * 1 point establishing a fair tax system....

Q:

4. Due to high company taxes prevailing un the auto mobile industries, the average prices of motor vehicle specifically sedan has increased from a N$170 000 to a N$190 000 and the quantity demand for...

Q:

1.Business profit is: A.the residual of sales revenue minus the explicit accounting costs of doing business. B.a normal rate of return. C.economic profit. D.the return on stockholders' equity. 2.The...

Q:

Give explanation for each question. 29.A measure of inflation that washes out price extremes employs: A.mean price changes. B.Weighted average price changes. C.the standard deviation of price...

Q:

1. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand: . The availability of close substitutes . Whether the good is a necessity or a luxury ....

Q:

QUESTION FOUR(20 Marks) Assume that a perfectly competitive hand sanitiser market is in long-run equilibrium. The price of hand sanitisers is observed to increase during the COVID 19 pandemic, and...

Q:

Kims Painting, Inc., requested that you perform a vertical analysis of its balance sheet to determine the component percentages of its assets, liabilities, and stockholders equity. Round to the...

Q:

Tinud has identified an impairment loss of $41m for one of its cash generating units. The carrying amount of the unit's net assets was $150m, whereas the unit's recoverable amount was only $109m. The...

Q:

What were some of the management functions of the Centre for National Operations?

Q:

When it is not possible to find solution in LPP, it is called as --- solution O Feasible Unbounded Infeasible O Unknown

Q:

1. To provide an understanding that social facts are mentally constructed and do not exist as an objective reality.

Q:

7. Give examples of the following when you formulate a social problem or phenomenon: a) When you generalize from reality. b) When you choose something from social reality and do not choose some-thing...

Q:

5. Give examples of binary thinking.