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

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Definitions:

Depositary Banks

Financial institutions that hold and manage securities for their clients, offering services such as safekeeping, collection of dividends, and exercise of rights.

Drawee Bank

A bank upon which a check or draft is drawn and is responsible for paying the amount to the individual or entity presenting it for payment.

Agent

A person authorized to act on behalf of another, known as the principal, in business transactions or other matters.

Stop Payment Order

A request made to a financial institution to cancel or halt the processing of a check or payment transaction.