Which Three of the Following Are Most Likely to Be

question 47

Multiple Choice

Which three of the following are most likely to be costs of financial distress?

• A) Uncertainties in customers' minds about dealing with this firm
• B) Temptation to fire sell healthy businesses as this will raise the most cash
• C) Low staff morale
• D) If assets can be sold quickly the price may be very high.

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Definitions:

Price Inelastic

Price inelastic refers to a situation where the demand for a good or service is relatively unaffected by changes in its price, indicating that consumers continue to purchase the product even if its price rises or falls significantly.

Income Elasticity

A measure of how the demand for a good or service changes in response to changes in income.

Price Inelastic

Refers to a situation where demand or supply for a product is relatively unresponsive to price changes.

Price Elasticity

It quantifies the sensitivity of the quantity demanded or supplied to alterations in its price.