The Price Elasticity of Demand for a Product Is 2

question 5

Multiple Choice

The price elasticity of demand for a product is 2, which implies that

• A) if the price increases by 1 percent, the quantity demanded will decrease by 2 percent.
• B) if the price increases by 1 unit, the quantity demanded will decrease by 2 units.
• C) if the price increases by 1 percent, the quantity demanded will increase by 1 percent.
• D) if the quantity demanded increases by 1 percent, the price will decrease by 2 percent.
• E) the change in quantity demanded divided by the change in price is equal to 2.

Calculate the present and net present value of the float under different conditions.

Distinguish between different types of floats and their effect on the firm's cash flow.

Evaluate the feasibility of various cash management tools including lockbox systems and their financial implications.

Utilize mathematical and statistical methods to solve cash management problems.

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Definitions:

Guanxi

A Chinese term describing the network of relationships among people, influencing personal and business interactions and outcomes.

Reciprocity

A mutual exchange of privileges or concessions, often between two countries, such as trade agreements or recognition of licenses.

Partnerships

A legally sanctioned business cooperation among several individuals who collectively manage the enterprise and distribute its profits.

Foreign Corrupt Practices Act

A U.S. law aimed at preventing companies from engaging in bribery and other unethical practices in foreign markets.