Which of the Following Would Tend to DECREASE the Elasticity

question 68

Multiple Choice

Which of the following would tend to DECREASE the elasticity of demand for good X?

• A)The cost of producing X decreases.
• B)Several firms which used to produce substitutes for X go out of business.
• C)Consumers begin spending a smaller percentage of their income on X.
• D)both b and c
• E)all of the above

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Definitions:

Percentage of Sales Method

An accounting technique used to estimate bad debts or the allowance for doubtful accounts based on a predetermined percentage of sales.

Current Revenues

Income generated from the normal business operations within the current accounting period.

Anticipated Current Expenses

Projected expenses that a company expects to incur within the current accounting period.

Petty Cash Funds

A small amount of cash on hand used for paying minor expenses like office supplies or courier fees.