Which of the Following Measures the Price Elasticity of Demand

question 1

Multiple Choice

Which of the following measures the price elasticity of demand?

• A)A change in quantity divided by the change in income
• B)A percentage change in quantity divided by the percentage change in income
• C)A change in quantity divided by the change in price
• D)A percentage change in quantity divided by the percentage change in price

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Definitions:

Financing Activities

Refers to the transactions and events that affect long-term liabilities and equity of a company, including issuing debt, selling shares, and paying dividends.

Direct Approach

A method of income statement preparation where expenses are listed directly against revenue items to show the net income.

Indirect Approach

A method often used in preparing cash flow statements where net income is adjusted for non-cash transactions and changes in working capital.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investment securities, as part of a company’s cash flow activities.