Suppose a 10 Percent Increase in the Price of Textbooks

question 280

Multiple Choice

Suppose a 10 percent increase in the price of textbooks decreases the quantity demanded by 20 percent. The elasticity of demand for textbooks is

• A) 0.2.
• B) 2.0.
• C) 5.0.
• D) 10.0.

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Definitions:

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers for goods or services sold on credit.

Days

Units of time consisting of 24 hours, often used to specify timeframes or durations.

Financial Data

Numerical data detailing a company's financial status, operations, and liquidity, utilized for evaluation and decision-making purposes.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the company.