The Price Elasticity of Demand for a Demand Curve That

question 86

Multiple Choice

The price elasticity of demand for a demand curve that has a zero slope is

• A) zero.
• B) one.
• C) negative but approaches zero as consumption increases.
• D) infinity.

---

Definitions:

Net Sales

Net sales are the total revenue from goods or services sold by a company, minus returns, allowances for damaged or missing goods, and discounts.

Average Accounts Receivable

The average amount of money owed to a company by its customers for goods or services provided on credit, over a specific period.

Acid-test Ratio

A financial ratio that measures a company’s ability to pay off its short-term liabilities with its quick assets, offering insight into financial stability.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or within the normal operating cycle of a business.