If Demand Is Unit Elastic, Revenue

question 161

Multiple Choice

If demand is unit elastic, revenue

• A)and price rise and fall together.
• B)rises as price falls.
• C)falls as price rises.
• D)remains constant as price rises or falls.

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Definitions:

Golden Parachutes

Large financial compensation packages provided to executives upon termination, usually in the context of a merger or takeover.

Horizon Value

The estimated value of a company or project at the end of a specific period, taking into account its future income potential.

Incremental Free Cash Flows

The additional cash flow a project generates for a company, calculated after accounting for the project's direct costs.

Conglomerate Mergers

Mergers between firms that operate in unrelated business activities, aiming for diversification and risk reduction.