Consider Two Demand Curves and the Same Price Change for Both

question 55

Multiple Choice

Consider two demand curves and the same price change for both. If the resulting percentage change in quantity demanded is greater for one (D1) than the other (D2) , we can conclude

• A) that D1 is elastic and D2 is inelastic.
• B) that D2 is more elastic than D1.
• C) that D1 is inelastic and D2 is elastic.
• D) that D1 is more elastic than D2.
• E) nothing about their relative elasticities.

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Definitions:

Closing Rate

The exchange rate used to convert foreign currency-denominated financial statements of a subsidiary into the reporting currency of the parent company at the balance sheet date.

Foreign Subsidiary

A company that is completely or partially owned and controlled by another company, but operates in a different country than the parent company.

Functional Currency

The currency of the primary economic environment in which an entity operates, usually reflected in its financial statements.

Assets and Liabilities

The resources owned by a company or individual that have value (assets) and the obligations owed to others (liabilities).