If the Price Elasticity of Demand for a Good Is

question 171

Multiple Choice

If the price elasticity of demand for a good is 2,then a 10 percent increase in the price of that good ________ the quantity demanded by ________ percent.

• A) increases; 20
• B) decreases; 2
• C) decreases; 10
• D) decreases; 20
• E) increases; 8

---

Definitions:

Useful Life

The estimated period over which an asset is expected to be functional and economically useful.

Commercial Substance

Involves a situation where the future cash flows of a business are expected to change significantly as a result of a transaction.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been expensed since it was put into use.

Recorded Cost

The cost of an asset as it appears in a company's books or financial statements, reflecting the original cost of acquisition.