Which of the Following Statements About the Price Elasticity of Demand

question 207

Multiple Choice

Which of the following statements about the price elasticity of demand is correct?

• A)The elasticity of demand for a good in general is equal to the elasticity of demand for a specific brand of the good.
• B)The absolute value of the elasticity of demand ranges from zero to one.
• C)Demand is more elastic in the long run than it is in the short run.
• D)Demand is more elastic the smaller the percentage of the consumer's budget the item takes up.

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Definitions:

Economic Exposure

The risk that a company's cash flow, earnings, or future value will be affected by changes in exchange rates.

May Coffee Futures

Agreements that bind the purchaser to buy, and the seller to sell coffee, at an agreed price and date in the future.

Lifetime High

The highest price level reached by a stock, bond, or other security during its entire trading history.

Lifetime Low

The lowest price level that a stock or security has reached over the entirety of its trading history.