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Generally speaking, goods with more price elasticity of demand a) Have their prices marked up less...

Generally speaking, goods with more price elasticity of demand

a) Have their prices marked up less than those with more price elasticity.

b) Have their prices marked proportionate to those with more price elasticity.

c)Have their prices marked up more than those with more price elasticity.

d) Are sold in larger quantities than those with more price elasticity.

e) Are sold with fewer producer transaction costs than those more price elasticity.

Choose correct answer and explain why the answer is correct please

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Answer #1

Goods with more Price elasticity of demand – (a) have their price marked up lower than those with high price elasticity.

           By high price elasticity we mean when price of a good changes its quantity changes more than the change in price. So, if the price of the product is marked higher than those with high price elasticity than people demand will shift away from the good, but if the marked price is less, than its quantity demanded will rise more than the fall in its Price.

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