When Price Goes Down, the Quantity Demanded Goes Up

question 178

Multiple Choice

When price goes down, the quantity demanded goes up.Price elasticity measures:

• A) how much the price goes down.
• B) how much the quantity goes up.
• C) how responsive the price change is in relation to the quantity change.
• D) how responsive the quantity change is in relation to the price change.

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Definitions:

AMT Income

Alternative Minimum Tax (AMT) income is a method of calculating taxable income according to parallel tax rules to ensure that certain taxpayers pay at least a minimum amount of tax.

Corporation

A legal entity recognized by law as separate from its owners, capable of holding assets, incurring liabilities, and conducting business.

FMV

Fair Market Value (FMV) refers to the price at which an asset would sell in the marketplace under conditions where both buyer and seller have reasonable knowledge of the asset and are willing to trade without external pressures.

Basis

Basis is the amount of investment in property for tax purposes, used to calculate gain or loss on a sale or other disposition of the property.