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After massive promotion of Rihanana's latest music album, the producers reacted by raising prices for her...

After massive promotion of Rihanana's latest music album, the producers reacted by raising prices for her albums . This implies that promotion expenditures made the album demand

a more elastic

b unitary elastic

c change due to psychological pricing

d less elastic

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Answer #1

Option D

  • This implies that the promotion expenditures made the Album demand less elastic which means that the demand was less responsive to the change in price.
  • Therefore to increase the demand of the Album, the right solution is to increase the price of the Album.
  • Hence the producers reacted by rising the prices of her Album, this shows that the promotion expenditures made the Album's demand less elastic.
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