If Supply Is Highly Elastic and Demand Shifts to the Left

question 116

Multiple Choice

If supply is highly elastic and demand shifts to the left:

• A) price will fall significantly; quantity hardly changes at all.
• B) price will hardly change at all; quantity will fall significantly.
• C) price will fall significantly as will quantity.
• D) price and quantity will hardly change at all.

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Definitions:

Elimination Entry

An accounting entry made in preparing consolidated financial statements to remove the effects of intercompany transactions.

Dividends

Payments made by a corporation to its shareholder members, usually derived from the company's profits.

Gross Margin

A financial metric indicating the difference between revenue and the cost of goods sold, divided by revenue, often expressed as a percentage.

Inventory Account

An account in the financial statements that reflects the value of a company's goods that are available for sale or in the process of being produced for sale.