If the Price Elasticity of Demand Is 1

question 76

Multiple Choice

If the price elasticity of demand is 1.4, a 10 percent increase in the price of the good results in

• A) a 14 percent increase in the quantity demanded.
• B) a 1.4 percent increase in the quantity demanded.
• C) a 1.4 percent decrease in the quantity demanded.
• D) a 14 percent decrease in the quantity demanded.
• E) There is not enough information to answer this question.

---

Definitions:

Impairment Losses

Financial losses recorded when an asset's market price drops below its book value.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its identifiable net assets, representing future economic benefits from assets not separately identified.

Reversed

In accounting, this refers to the action of undoing or negating a journal entry that was previously made, often because it was an error.

Change In Estimate

An adjustment made to the accounting records to reflect new information or subsequent changes in judgments regarding financial statement estimates.