Which of the Following Illustrates Elastic Demand

question 93

Multiple Choice

Which of the following illustrates elastic demand?

• A) A 10 percent increase in price causes a 5 percent decrease in quantity demanded.
• B) A 10 percent increase in price causes a 10 percent reduction in quantity demanded.
• C) A 10 percent increase in price causes a 20 percent decrease in quantity demanded.
• D) a price elasticity of 0.8
• E) a price elasticity of 1.0

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Definitions:

Percent of Receivables Method

An accounting method used to estimate the amount of accounts receivable that will not be collected by calculating a percentage of receivables deemed uncollectible.

Uncollectible Accounts Receivable

Accounts from customers that are considered unrecoverable, leading to a write-off as a bad debt expense.

Allowance

A reduction from the gross amount of an asset or liability, created to account for potential future adjustments such as doubtful debts or returns.

Processing Fee

A charge assessed for processing a transaction, application, or request, common in financial services.