The Price Elasticity of Demand for Eggs Is −0

question 108

Multiple Choice

The price elasticity of demand for eggs is −0.27 and the price elasticity of demand for soft drinks is −0.70. Therefore, the demand for eggs:

• A) is more elastic than the demand for soft drinks.
• B) is less elastic than the demand for soft drinks.
• C) cannot be compared to the demand for soft drinks because both have negative price elasticities.
• D) cannot be compared to the demand for soft drinks because eggs cannot be substituted for soft drinks.

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Definitions:

Net Income

The total earnings or profit of a company after deducting all expenses, taxes, and losses from the total revenue.

Retained Earnings

The portion of net income that is retained by the company rather than distributed to its shareholders as dividends.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits in the form of cash.

Declaration of Dividends

The formal announcement by a company's board of directors to distribute profits to shareholders, specifying the dividend amount and payment date.