The Law of Demand Refers to the

question 368

Multiple Choice

The law of demand refers to the

• A) decrease in price that can be expected as more units of a product are demanded.
• B) increase in price that results from an increase in demand for a good of limited supply.
• C) inverse relationship between the price of a good and the quantity demanded.
• D) increase in the quantity of a good available when its price increases.

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Definitions:

Depreciation

The systematic allocation of the cost of an asset over its useful life.

Investment Center

A business unit within a company that is responsible for its own revenues, expenses, and asset investments, with its performance measured by its ability to generate income relative to its assets.

Minimum Required Return

The lowest acceptable return on an investment, based on risk tolerance and financial goals.

Residual Income

The income that exceeds the minimum required return on investment or capital employed; often used as a performance measure.