The Type of Elasticity of Demand That Is Most Commonly

question 48

Multiple Choice

The type of elasticity of demand that is most commonly positively valued but that can be negative at times is called:

• A)income elasticity of demand and it is negative when the good is a normal good.
• B)income elasticity of demand and it is negative when the good is an inferior good.
• C)price elasticity of demand and it is negative when the slope of the demand curve is negatively sloped.
• D)None of the above.

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Definitions:

Capital

The financial resources used by a business to fund its operations and growth, including equity and debt.

Income Statement Accounts

Accounts that are included in the income statement, showing revenues and expenses for a specific period.

Purchases Returns

Transactions where a buyer returns goods previously purchased to the seller, often due to defects or other issues, resulting in a credit to the buyer's account.

Sales Returns

Goods returned by the customer to the seller for a refund or credit, typically due to defects or other dissatisfaction.