A Good Will Tend to Be More Price Elastic If

question 116

Multiple Choice

A good will tend to be more price elastic if it

• A)is a luxury good.
• B)has no close substitutes.
• C)is a small part of the household budget.
• D)is a necessity.

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Definitions:

Scenario Analysis

A business planning technique in which the implications of variations in planning assumptions are explored. Also known as “what-if-ing.”

Abandonment Option

A financial decision allowing companies to cease a project or investment to avoid further losses.

NPV

Net Present Value; a calculation used to assess the profitability of an investment, considering the present value of its cash flows.

Variances

Differences between planned financial outcomes and actual results, used in budgeting and financial management to analyze performance.