how-does-understanding-the-price-elasticity-of-demand-help-businesses-in-setting

Question

How does understanding the price elasticity of demand help businesses in setting prices for new products?

Accepted Answer

It helps predict how changes in price will affect total revenue.

Answer

It allows businesses to ignore competitor pricing strategies.

Answer

It ensures that all products will have perfectly elastic demand.

Answer

It guarantees that demand will always increase with price decreases.