A Perfectly Inelastic Demand Curve Has a Price Elasticity

question 170

Multiple Choice

A perfectly inelastic demand curve has a price elasticity

• A)equal to zero.
• B)that varies.
• C)equal to 1.
• D)less than 1.
• E)of infinity.

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Definitions:

Debt-Equity Ratio

A financial indicator showing the relationship between borrowed funds and equity in a company's asset financing.

Taxable Income

The portion of an individual's or company's income used to determine how much tax will be owed to the government.

Interest Tax Shield

The reduction in income taxes that results from taking an allowable deduction for interest expenses.

Interest Tax Shield

The decrease in income taxes that occurs by subtracting a permitted deduction, like debt interest, from taxable income.