If the Demand for a Good Is Price-Elastic,an Increase in Price

question 1

Multiple Choice

If the demand for a good is price-elastic,an increase in price will:

• A)lead to a fall in quantity demanded but an increase in the firm's revenue.
• B)not affect the total revenue of the firm.
• C)lead to a fall in the firm's revenue but an increase in quantity demanded.
• D)lead to an increase in quantity demanded.
• E)decrease the firm's revenue by the same percentage as the increase in price.

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Definitions:

Conversion Price

The predetermined price at which convertible security, such as a convertible bond or preferred stock, can be converted into a specified amount of common stock.

Coupon

The annual interest rate paid on a bond, expressed as a percentage of the face value.

Convertible Bond

A category of bond which allows conversion into a specific quantity of the issuer's equity at designated times throughout its lifespan, often at the choice of the person holding the bond.

Conversion Price

The predetermined price at which a convertible security, like a convertible bond or preferred share, can be converted into common shares of the issuing company.