If a Good Has Unitary Price Elasticity of Demand, Then

question 20

Multiple Choice

If a good has unitary price elasticity of demand, then the absolute value of the percentage change in _____ equals _____.

• A) quantity demanded; one
• B) price; one
• C) quantity demanded; the absolute value of the corresponding percentage change in price
• D) price; the absolute value of the percentage change in quantity demanded, plus one

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Definitions:

Net Operating Cash Flows

The amount of cash that a company generates from its normal business operations after subtracting operating expenses.

Future Value

The value of an investment at a specified date in the future, accounting for specified interest rates or returns.

Net Present Value

A financial metric that calculates the value of a series of future cash flows in today's dollars, considering the time value of money.

Risk Premium

Expected additional return that compensates for the uncertainty involved with an investment.