If a 1 Percent Change in Price Results in a 5

question 101

Multiple Choice

If a 1 percent change in price results in a 5 percent change in quantity demanded,then

• A)the price elasticity of demand is 5.
• B)the slope of the demand curve is 1/5.
• C)the slope of the demand curve is 5.
• D)the price elasticity of demand is 1/5.
• E)there is not enough information to calculate slope or elasticity.

---

Definitions:

Revenues

The aggregate revenue from selling goods or providing services which constitute the core business activities.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Financial Ratios

Quantitative measures derived from financial statement analysis used by investors and analysts to evaluate a company's financial health and performance.

P/E Ratio

The price-to-earnings (P/E) ratio is a valuation measure comparing the current share price of a company to its per-share earnings.