When a Parent Acquires 100% of the Voting Stock of a Subsidiary

question 74

Multiple Choice

When a parent acquires 100% of the voting stock of a subsidiary, that subsidiary:

• A) lives on as a separate legal entity
• B) continues to exist as an accounting entity, but it ceases to exist in any legal form
• C) ceases to exist as a separate legal entity, but it is still accounted for as a separate accounting entity
• D) automatically becomes part of one large legal entity that consists of the parent and the subsidiary together

Identify factors affecting price elasticity of demand including time horizon, availability of close substitutes, definition of the market, and whether a good is a necessity or a luxury.

Analyze the effect of price changes on quantity demanded using the concept of elasticity.

Determine the relationship between price elasticity and total revenue.

Apply the concept of elasticity to various market scenarios including the impact on total revenue and decision-making.

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Definitions:

Queuing Theory

The mathematical study of waiting lines or queues, which aims to predict queue lengths and waiting times in various service or process systems.

Linear Programming

A mathematical method for determining a way to achieve the best outcome (such as maximum profit or lowest cost) in a given mathematical model for some list of requirements represented as linear relationships.

Mathematical Forecasting

The use of mathematical models and statistical techniques to predict future events, trends, or behaviors based on historical data.

Petroleum Reserves

Quantities of crude oil and natural gas geologically and commercially feasible for extraction.