The Demand Curve for Froot Loops Breakfast Cereal Is Veryelastic

question 38

Multiple Choice

The demand curve for Froot Loops breakfast cereal is veryelastic because:

• A)most breakfast cereals are considered a luxury good.
• B)there are many good substitutes for Froot Loops.(True Answer )Correct
• C)the demand curve is negatively sloped.
• D)it is one of the most advertised cereals in the world.

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Definitions:

Common Stock

A type of equity ownership in a corporation, representing a claim on a portion of the company’s profits and the right to vote on matters affecting the company.

Acquisition

The process of obtaining control of another company by purchase or exchange of stock.

Fair Values

The estimated market value of an asset or liability, based on current prices in an open and competitive market.

Credit Balance

A situation in accounting where the sum of credits in a ledger account exceeds the sum of debits. It often indicates an amount owed to the account holder.