If Demand Is Perfectly Inelastic, the Absolute Value of the Price

question 23

Multiple Choice

If demand is perfectly inelastic, the absolute value of the price elasticity of demand is

• A)zero.
• B)less than one.
• C)more than one.
• D)equal to the absolute value of the slope of the demand curve.

Understand the concept of financial saving goals and how to calculate future value towards achieving those goals.

Apply the concept of the time value of money to various financial planning and investment situations.

Estimate the future value of annuities and single cash flows using appropriate interest rates.

Analyze and compare different savings and payment options to make informed financial decisions.

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Definitions:

Constant

A fixed value that does not change in mathematical expressions or in the formulation of algorithms and calculations.

Expected Dividend

The projected payment a company is expected to distribute to its shareholders from its earnings.

Market Risk Premium

The market risk premium is the additional return an investor expects from holding a risky market portfolio instead of risk-free assets.

Risk-Free Rate

The theoretical rate of return on an investment with no risk of financial loss, often represented by government bonds.