If the Price Elasticity of Demand for a Given Product

question 102

Multiple Choice

If the price elasticity of demand for a given product is 0.7, this means that

• A)the percentage change in quantity demanded is 0.7 times the percentage change in price.
• B)if quantity demanded fell by 1 percent, price would fall by 7 percent.
• C)if price was raised 7 percent, quantity demanded would fall by 0.7 percent.
• D)if price was raised 7 percent, quantity demanded would rise 0.7 percent.
• E)the percentage change in price is 0.7 times the percentage change in quantity demanded.

---

Definitions:

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business.

Operating Activities

Activities that relate to the primary, day-to-day operations of a business, such as selling products or providing services.

Prepaid Expenses

Assets on the balance sheet representing services or goods paid for upfront but not yet consumed.

Indirect Method

A technique used in cash flow statement preparation, adjusting net income for changes in non-cash accounts to arrive at operating cash flow.