If the Demand Curve for a Good Is a Horizontal

question 43

Multiple Choice

If the demand curve for a good is a horizontal line, then the good has

• A)zero income elasticity.
• B)price elasticity of demand equal to zero.
• C)infinite price elasticity of demand.
• D)a price elasticity of demand that is likely to rise in the short run.
• E)a price elasticity of demand that is likely to fall in the short run.

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Definitions:

Useful Life

The expected period of time during which an asset is useful to the owning entity and contributes to its cash flows.

Prepaid Rent

It represents payments made for rent before the rental period has occurred, classified as a current asset on the balance sheet.

Adjusting Entry

Journal entries made at the end of an accounting period to update accounts for accruals and deferrals not captured in daily transactions.

Rent Expense

The cost incurred by a company for utilizing a property or equipment for business operations, typically recognized over the period the property is used.