Demand Is Elastic If

question 110

Multiple Choice

Demand is elastic if

• A) consumers respond strongly to changes in the product's price.
• B) a large percentage change in price brings about a small percentage change in quantity demanded.
• C) a small percentage change in price brings about a small percentage change in quantity demanded.
• D) the quantity demanded is not responsive to price changes.
• E) the demand curve is vertical.

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Definitions:

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid.

Operating Activities

Business activities that relate directly to the production, sale, and delivery of a company's products or services, generating revenue.

Cash Dividends

Payments made by a corporation to its shareholders out of its profits or reserves in the form of cash.

Direct Method

An accounting approach for preparing the cash flow statement where operating cash receipts and payments are listed directly.