If Demand for a Good Is Inelastic, One Can Conclude

question 66

Multiple Choice

If demand for a good is inelastic, one can conclude that

• A) the good is a necessity.
• B) quantity demanded does not respond to price changes.
• C) total revenue will decrease when the price increases.
• D) the change in quantity demanded is less than the change in price.
• E) the percentage change in price is greater than the percentage change in quantity demanded.

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Definitions:

Retained Earnings

The portion of a company's profits not distributed as dividends to shareholders but retained for reinvestment in the business.

Par Value

Refers to the face value of a bond or the stock value stated in the corporate charter, establishing a minimum price per share for stocks issued.

Dividend Income

Income received from owning shares of a company that pays dividends, representing a portion of the company's profits distributed to shareholders.

Growth Rate

The rate at which a company's sales, earnings, dividends, or other key metrics increase over a specified period of time.