Suppose the Price Elasticity of Demand for Your Economics Textbook

question 16

Multiple Choice

Suppose the price elasticity of demand for your economics textbook is -1.If the publisher raises the price by 5 percent,

• A)revenues will rise 5 percent
• B)quantity demanded will rise 5 percent
• C)total revenues will not change
• D)revenues will fall
• E)revenues will fall 5 percent

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Definitions:

Risk-Free Rate

The estimated yield from an investment that carries no risk, often illustrated by government bond yields.

High Water Mark

The previous value of a portfolio that must be reattained before a hedge fund can charge incentive fees.

Incentive Fees

Fees paid to a fund manager based on the performance of the fund, designed to align the interests of the manager with those of the investors.

Portfolio Value

The total worth of all the financial assets held in an investment portfolio.