If a 1 Percent Decrease in the Price of Breakfast

question 161

Multiple Choice

If a 1 percent decrease in the price of breakfast cereals results in a 2 percent increase in the quantity demanded for breakfast cereals, then the price elasticity of the demand for breakfast cereals is

• A)2 cents.
• B)2 pounds of breakfast cereals.
• C)2 percent.
• D)$2.
• E)2.

---

Definitions:

Consolidated Dividends

Dividends paid by a parent company that include those received from and paid out to its subsidiaries.

Amortization

The gradual reduction of the book value of an intangible asset or loan balance over time through regular payments.

Net Income

The net income of a company following the deduction of all expenses and taxes from its total revenues.

Dividends

Payments made by a corporation to its shareholders, usually from profits, as a distribution of earnings.