One of the Reasons That Price Elasticities of Demand Are

question 100

Multiple Choice

One of the reasons that price elasticities of demand are always stated as positive numbers is because:

• A) the numerators and denominators of the formula are both negative.
• B) the numerators and denominators of the formula are both positive.
• C) price increases always lead to increases in quantity demanded.
• D) price decreases always lead to decreases in quantity demanded.
• E) price elasticities are always negative, so we ignore the sign.

---

Definitions:

Stock Dividends Distributable

Shares that have been declared as a dividend but have not yet been distributed to shareholders.

Corporate Form

A legal structure for organizing a business as a separate entity from its owners, providing limited liability and other legal benefits.

Shareholder's Liability

The financial responsibility of the shareholders of a company is typically limited to their investment in the company's shares.

Retained Earnings

Retained Earnings represent the cumulative amount of net income a company retains, rather than distributing to shareholders as dividends.