If the Demand for Bananas Has a High Price Elasticity

question 98

Multiple Choice

If the demand for bananas has a high price elasticity, then a 5 percent decrease in the price of bananas will result in

• A)a more than 5 percent increase in the quantity demanded.
• B)a less than 5 percent increase in the quantity demanded.
• C)no change in the quantity demanded.
• D)a more than 5 percent decrease in the quantity demanded.
• E)a less than 5 percent decrease in the quantity demanded.

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Definitions:

Value In Use

The present value of the future cash flows expected to be derived from an asset or cash-generating unit.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in the time value of money calculations.

Goodwill

An intangible asset that represents the excess value of a company's fair market value over the net assets of a business it acquires.

Impairment

The diminution in the recoverable value of an asset below its carrying amount, reflecting a decline in the quality, quantity, or market value of the asset.