If Two Linear Demand Functions Intersect the Quantity Axis at the Same

question 34

Multiple Choice

If two linear demand functions intersect the quantity axis at the same point, then:

• A)when prices are equal, so are the elasticities.
• B)when quantities are equal, so are the price elasticities.
• C)when prices are equal, so are the quantities.
• D)at the point of intersection the two elasticities are equal to one.

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Definitions:

Discounted Payback Period

The time required to recoup the cost of an investment taking the time value of money into account, effectively the period it takes for an investment's cash flows to cover its initial cost.

Cash Inflows

Money coming into a business from various sources, including sales, investment income, and financing activities.

Required Rate

The minimum percentage return that an investor expects to achieve from an investment.

Average Accounting Return

A measure of the profitability of an investment, calculated as the average net income divided by the average book value of the investment.