When a Firm Produces a Good or Service That Has

question 45

Multiple Choice

When a firm produces a good or service that has an elastic demand it will:

• A) be less able to increase price without losing customers
• B) be more able to increase price without losing customers
• C) decrease sales and revenue by lowering price
• D) be able to change price without any effect on sales and revenue
• E) increase the quantity demanded by increasing the price

---

Definitions:

Income Taxes Payable

The amount of income tax a company owes to the government but has not yet paid, reflected as a liability on the balance sheet.

Operating Activities

are the day-to-day functions of a business that involve the production, sales, and delivery of a company's products and services.

Net Cash

The difference between a company's total cash inflows and outflows within a given period.

Investing Activities

Transactions related to the acquisition or disposal of long-term assets and investments, used to assess a company's growth projects and capital expenditure.