CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

If a price cut for a product increases total revenue, demand is best described as ______.
A. elastic
B. inelastic
C. unit elastic
Explanation: A product's demand is elastic if demand increases by a greater percentage than the percentage price cut when prices are cut. For example, if a 1 percent price cut increases the quantity sold by more than 1 percent, total revenue increases and demand is said to be elastic.

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