CIMA Fundamentals of Business Economics BA1 Question # 15 Topic 2 Discussion
BA1 Exam Topic 2 Question 15 Discussion:
Question #: 15
Topic #: 2
A promoter has arranged a large outdoor concert. All the costs are fixed and there are no variable costs associated with the number of spectators attending.
Which of the following statements about the profit maximizing price is FALSE?
A.
It is the price at which Marginal Revenue is zero
B.
At this price, the price elasticity of demand will be unity (i.e. equal to 1)
C.
This price will ensure the promoter covers the cost of the concert
D.
This is the price which maximizes the revenue the promoter earns from the concert
Chosen Answer:
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