The Price Elasticity of a Good Will Tend to Be

question 93

Multiple Choice

The price elasticity of a good will tend to be larger:

• A) the longer the relevant time.
• B) the fewer the number of substitute goods available.
• C) if it is a staple or necessity with few substitutes.
• D) if the share of income spent on the good is small.

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Definitions:

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recorded as assets on the balance sheet until they are consumed or used.

Accounts Receivable

The amount owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Net Income

The total revenue minus expenses, taxes, and costs, representing the profit of a company over a specific time period.

Direct Method

The direct method in accounting refers to a way of reporting cash flows from operating activities by directly listing major classes of gross cash receipts and payments.