{"id":50769,"date":"2024-04-15T23:15:06","date_gmt":"2024-04-15T23:15:06","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=50769"},"modified":"2024-04-15T23:15:06","modified_gmt":"2024-04-15T23:15:06","slug":"a-business-currently-selling-10000-units-of-its-product-per-month-plans-to-reduce-the-retail-price-from-rs-1-to-rs-0-90-it-knows-from-previous-experience-that-the-price-elasticity-of-demand-for","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/a-business-currently-selling-10000-units-of-its-product-per-month-plans-to-reduce-the-retail-price-from-rs-1-to-rs-0-90-it-knows-from-previous-experience-that-the-price-elasticity-of-demand-for\/","title":{"rendered":"A business, currently selling 10,000 units of its product per month, plans to reduce the retail price from Rs. 1 to Rs. 0.90. It knows from previous experience that the price elasticity of demand for this product is (-) 1.5. Assuming no other changes, the sales the business can now expect each month will be:"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9751232357a\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    8,500                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    10,500                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"true\">\r\n                    11,000                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    11,500                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: <strong>C. 11,000<\/strong><\/p>\n<p>Price elasticity of demand is a measure of how responsive consumers are to changes in price. A price elasticity of demand of -1.5 indicates that a 1% decrease in price will lead to a 1.5% increase in demand.<\/p>\n<p>In this case, the business is planning to reduce the price of its product from Rs. 1 to Rs. 0.90. This is a 10% decrease in price. Assuming that the price elasticity of demand remains constant, we can expect demand to increase by 15%. This means that the business can now expect to sell 11,000 units of its product per month, up from 10,000 units per month before the price reduction.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: 8,500. This is the number <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n           <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div>  Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> of units that the business would expect to sell if the price elasticity of demand were -2. A price elasticity of demand of -2 indicates that a 1% decrease in price will lead to a 2% increase in demand. In this case, the business would expect to sell 8,500 units of its product per month, down from 10,000 units per month before the price reduction.<\/li>\n<li>Option B: 10,500. This is the number of units that the business would expect to sell if the price elasticity of demand were -1. A price elasticity of demand of -1 indicates that a 1% decrease in price will lead to a 1% increase in demand. In this case, the business would expect to sell 10,500 units of its product per month, up from 10,000 units per month before the price reduction.<\/li>\n<li>Option C: 11,000. This is the correct answer. As explained above, the business can now expect to sell 11,000 units of its product per month, up from 10,000 units per month before the price reduction.<\/li>\n<li>Option D: 11,500. This is the number of units that the business would expect to sell if the price elasticity of demand were -0.5. A price elasticity of demand of -0.5 indicates that a 1% decrease in price will lead to a 0.5% increase in demand. In this case, the business would expect to sell 11,500 units of its product per month, up from 10,000 units per month before the price reduction.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>A business, currently selling 10,000 units of its product per month, plans to reduce the retail price from Rs. 1 to Rs. 0.90. It knows from previous experience that the price elasticity of demand for this product is (-) 1.5. Assuming no other changes, the sales the business can now expect each month will be:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/a-business-currently-selling-10000-units-of-its-product-per-month-plans-to-reduce-the-retail-price-from-rs-1-to-rs-0-90-it-knows-from-previous-experience-that-the-price-elasticity-of-demand-for\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A business, currently selling 10,000 units of its product per month, plans to reduce the retail price from Rs. 1 to Rs. 0.90. It knows from previous experience that the price elasticity of demand for this product is (-) 1.5. 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It knows from previous experience that the price elasticity of demand for this product is (-) 1.5. Assuming no other changes, the sales the business can now expect each month will be:","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/a-business-currently-selling-10000-units-of-its-product-per-month-plans-to-reduce-the-retail-price-from-rs-1-to-rs-0-90-it-knows-from-previous-experience-that-the-price-elasticity-of-demand-for\/","og_locale":"en_US","og_type":"article","og_title":"A business, currently selling 10,000 units of its product per month, plans to reduce the retail price from Rs. 1 to Rs. 0.90. It knows from previous experience that the price elasticity of demand for this product is (-) 1.5. 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