If the Absolute Price Elasticity of Demand for Automobiles Is

question 152

Multiple Choice

If the absolute price elasticity of demand for automobiles is equal to 0.75, we say

• A) that demand is inelastic.
• B) that demand is elastic.
• C) that there is a strong responsiveness of quantity demanded to automobiles price cuts.
• D) none of the above is correct.

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Definitions:

Operating Cycles

Operating cycles represent the duration it takes for a company to purchase inventory, sell products or services, and collect cash from customers, depicting the cash flow process.

Profit Margins

A financial metric indicating the percentage of revenue that exceeds the costs of goods sold, showing the profitability of a company.

Perpetual Inventory System

An accounting system that continuously updates inventory records after each purchase or sale.

Discount Period

The time frame in which a discount is offered for early payment on goods or services, often used to encourage quicker payment by customers.