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:

Stockholders' Equity

The remaining value of a company's assets after all liabilities are subtracted, reflecting the equity held by shareholders.

Cash Dividend

A payment made by a company out of its profits to shareholders, usually in the form of cash.

No-Par Stock

No-Par Stock is a class of shares which does not have a nominal or face value assigned to them, meaning the value of the shares is determined by the amount investors are willing to pay for them in the market.

Common Stock

A type of equity security that represents ownership in a corporation, with voting rights and potential for dividends.