If a Store Sells a Good with Elastic Demand, Then

question 227

Multiple Choice

If a store sells a good with elastic demand, then a decrease in the price would lead to

• A) an increase in total revenue.
• B) a decrease in total revenue.
• C) a decrease in the quantity sold.
• D) no change total revenue.

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Definitions:

Capital Cost Allowance

A tax deduction in some jurisdictions for depreciation of assets, reflecting the wear and tear or obsolescence of physical assets.

Declining Balance

A method of calculating depreciation for an asset, whereby the asset loses value at a decreasing rate over time.

GAAP

Generally Accepted Accounting Principles, which are a common set of accounting rules and standards used for financial reporting.

SYD Calculations

Sum-of-Years' Digits method, a form of accelerated depreciation where depreciation is higher in the earlier years of an asset's life.