ed for tire chains. Similarly, an unexpected tropical storm in the Caribbean could cause a decrease in the demand for air express transportation to the area regardless of the price of the fare (Mastrianna & Hailstones, 1995).
Changes in product demand in relation to product price reflect the price elasticity of demand of the product. A low price elasticity of demand means that the proportionate change in demand is less than the proportionate change in price. A low price elasticity of demand, in some instances, may indicate that a firm or an industry may maximize revenues by raising prices. Alternatively, however, low price elasticity may indicate that a firm or industry enjoys a significant competitive advantage (Mastrianna & Hailstones, 1995).
A high price elasticity of demand means that the proportionate change in demand i
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