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Hello Sir
kindly help me answer this because the answer that’s in the revision kit is given but i think there’s a mistakeThe following statements have been made about the price elasticity of demand for a product.
(1) Price elasticity of demand may be reduced by means of advertising and sales promotion activities.
(2) When elasticity of demand is very inelastic customers are not sensitive to either price or advertising
and sales promotion activities.
Which of the above statements is/are true?
A 1 only
B 2 only
C Neither 1 nor 2
D Both 1 and 2Neither statement is true.
Price elasticity only measure the effect of changes in price on the demand (not the affect of advertising).
A
Advertising and sales promotion may persuade customers to pay more for a product, and so may
make demand more inelastic in response to price changes. When demand is very inelastic with
regard to the sales price, elasticity may be increased to some extent by means of advertising and
sales promotion.This is the answer from the revision kit. while thought the answer was supposed to be B
If you already knew the answer then why did you not say so!!!
I have already explained why I think the correct answer is C
Because I thought there’s a Mistake in the text book as i mentioned that ” the answer that’s in the revision kit is given but i think there’s a mistake”. I thought the answer was supposed to be B while in the kit it was A.
Thank you
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