When the Price of Fresh Fish Increases 10%, Quantity Demanded

question 105

Multiple Choice

When the price of fresh fish increases 10%, quantity demanded decreases 5%. The price elasticity of demand for fresh fish is ________ and total revenue from fresh fish sales will ________.

• A) inelastic; increase
• B) inelastic; decrease
• C) elastic; decrease
• D) elastic; increase

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Definitions:

Parent Company

A corporation that owns enough voting stock in another corporation to control its management and operations, making the latter a subsidiary.

Outstanding Stock

The stock in the hands of stockholders.

Cost Method

An accounting approach for valuing certain assets and investments at their original purchase cost, with adjustments for depreciation or impairment.

Stock Investments

Financial assets representing ownership in a corporation, giving the holder a share of the corporation's earnings and assets.