Figure 5-9 -Refer to Figure 5-9.If Price Increases from $10 to $15,total

question 141

Multiple Choice

Figure 5-9

-Refer to Figure 5-9.If price increases from $10 to $15,total revenue will

• A) increase by $20, so demand must be inelastic in this price range.
• B) increase by $5, so demand must be inelastic in this price range.
• C) decrease by $20, so demand must be elastic in this price range.
• D) decrease by $10, so demand must be elastic in this price range.

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Definitions:

Stock Dividend

A distribution of additional shares of a corporation’s own stock on a pro rata basis at no cost to existing stockholders.

Issuing Corporation

A company that is in the process of offering its securities (stocks or bonds) for sale to the public or investors.

Outstanding Shares

The total shares of a corporation that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Authorized Shares

The maximum number of shares of stock a corporation can issue as specified in its charter.