If the Price Elasticity of Demand for Automobiles Is 2

question 142

Multiple Choice

If the price elasticity of demand for automobiles is 2:

• A) a 10 percent decrease in price would result in a 20 percent decrease in quantity demanded.
• B) a 10 percent decrease in price would result in a 20 percent increase in quantity demanded.
• C) a 10 percent increase in price would result in a 20 percent increase in quantity demanded.
• D) a 10 percent increase in price would result in a 10 percent decrease in quantity demanded.

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Definitions:

Inventory Ledger

A detailed record maintaining the quantity and value of a company's inventory over time.

Purchases Journal

An accounting ledger in which purchases of goods on credit are recorded.

Current Selling Prices

The present market value at which goods or services are offered for sale.