If the Price of a Product Increases by 10 Percent

question 63

Multiple Choice

If the price of a product increases by 10 percent and the quantity demanded decreases by 15 percent, then the

• A)product has an elastic demand.
• B)product has an inelastic demand.
• C)product has an elastic supply.
• D)product has a unit-elastic demand.
• E)producer should raise the price further to increase total revenue.

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Definitions:

Subsidiary Ledger

A detailed ledger that contains all the transactions of a particular account, which then summarizes into a single general ledger account.

Accounts Receivable

Represents money owed to a business by its clients or customers for goods or services delivered but not yet paid for.

Financial Statement

A documented summary of financial transactions and standing for a company, person, or alternative entity.

Normal Balance

The usual balance side (debit or credit) on which an account increases.