If a Price Reduction Leads to Larger Total Revenue, Demand

question 132

Multiple Choice

If a price reduction leads to larger total revenue, demand is

• A)perfectly inelastic
• B)inelastic
• C)unit elastic
• D)elastic
• E)perfectly elastic

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Definitions:

Return on Equity

A measure of a corporation's profitability, calculated by dividing net income by shareholder equity, indicating how effectively company management is using investments to generate earnings growth.

Stock Market Index

A statistical measure that shows changes in the stock market by tracking a selected set of stocks to represent a particular market or sector.

Project Cash Flows

Net amounts of cash that are to be received or paid out over the duration of a project, determining its profitability and feasibility.

Predictable

Capable of being foreseen or declared in advance with a high degree of certainty.