Which of the Following Statements About Price Elasticity of Demand

question 123

Multiple Choice

Which of the following statements about price elasticity of demand most accurate?

• A)The more substitutes a product has,the more likely it is to be price elastic.
• B)Almost all products show price inelasticity.
• C)Nondiscretionary,(necessary)purchases are price elastic.
• D)With inelastic demand,reducing price has a very large impact on revenues.
• E)With inelastic demand,manufacturers change prices frequently to capitalize on consumer behavior.

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Definitions:

Liquidity of Receivables

Indicates how quickly receivables can be turned into cash, reflecting a company's efficiency in managing credit it extends to customers.

Cash Sales

Transactions in which payment is made in full at the time of the sale, typically in cash.

Petty Cash Fund

A small amount of cash on hand used for covering minor expenses, managed through a system of vouchers and replenishments.

Voucher System

A control mechanism in accounting where vouchers are used to authorize the payment of a liability; an internal control for cash disbursements.