AMA Exam PCM Topic 1 Question 2 Discussion

Actual exam question for AMA's PCM exam

Question #: 2
Topic #: 1

EZ, a manufacturer of electronic appliances, manufactures sandwich toasters, waffle makers, and sandwich-waffle makers. Recently, EZ reduced the price of sandwich-waffle makers by 20%. This increased the sales of sandwich-waffle makers by 20% and reduced the sale of sandwich toasters by 30% and waffle makers by 25%. Which of the following is true of this scenario?

AThe price elasticity of sandwich-waffle makers is -2.

BThe cross-price elasticity of sandwich-waffle makers and sandwich toasters is -1.

CThe cross-price elasticity of sandwich-waffle makers and waffle makers is -2.

DSandwich-waffle makers and sandwich toasters are likely to be substitute products.

ESandwich-waffle makers and waffle makers are complementary products.

Show Suggested Answer

Suggested Answer: D

by Renea at May 08, 2022, 01:13 AM

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