When the Price Elasticity of Demand Is Large, Then

question 88

Multiple Choice

When the price elasticity of demand is large, then

• A) the product is more likely to be a necessity.
• B) the responsiveness of quantity demanded to a change in price is small.
• C) the percentage change in price divided by the percentage change in quantity demanded is large.
• D) the responsiveness of quantity demanded to a change in price is large.

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Definitions:

Cash Inflows

Money or funds received by a business during a period of time from various sources including sales, investments, and financing.

Average Accounting Return

A measure of the profitability of an investment, calculated as the average net income generated by an investment divided by its initial cost.

Marginal Tax Rate

The rate at which your last dollar of income is taxed, essentially the tax rate that applies to each additional dollar of income.