If a One Percent Increase in the Price of Bananas

question 362

Multiple Choice

If a one percent increase in the price of bananas leads to a one percent decrease in the quantity of bananas demanded, then the demand for bananas is

• A) elastic.
• B) inelastic.
• C) unit-elastic.
• D) perfectly inelastic.

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Definitions:

Invested Assets

Resources or capital that have been allocated to investments such as stocks, bonds, real estate, or other vehicles with the expectation of earning a return.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding direct production costs (also known as overheads).

Negotiated Price Approach

A pricing strategy where the final sale price of a product or service is determined through bargaining between the buyer and the seller.

Market Price Approach

An approach to transfer pricing that uses the price at which the product or service transferred could be sold to outside buyers as the transfer price.