If Demand Is Price Inelastic, a Change in Price in Either

question 123

Multiple Choice

If demand is price inelastic, a change in price in either direction (up or down) causes:

• A) a change in total revenue in the opposite direction.
• B) a change in total revenue in the same direction.
• C) an increase in total revenue.
• D) a decrease in total revenue.

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Definitions:

Merchandise Inventory

Represents the goods a company has in stock that are available for sale to customers.

Sales on Account

Revenue generated from sales where payment is yet to be collected, often recorded as accounts receivable.

Disbursements Section

A part of cash flow management that records cash outflows or payments made by a business during a specific period.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, helping managers ensure that sufficient cash is available for operations.