Price Elasticity of Demand Is Determined by a Number of Factors

question 2

Multiple Choice

Price elasticity of demand is determined by a number of factors, such as the availability of substitutes, the necessity of the product or service, and

• A) the cash outlay of the purchase relative to a person's disposable income.
• B) the stage of the product or service in its product life cycle.
• C) the degree of carrying costs for the manufacturer or distributor.
• D) the financial resources of the organization itself.
• E) the ability of the organization to meet sudden increases in demand.

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Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by the company, reducing the amount of outstanding stock on the open market.

Income Statement

A financial report summarizing the revenues, costs, and expenses incurred during a specific period, typically a fiscal quarter or year.

Income Before Taxes

The total revenue a company generates minus the total expenses before income tax expense is subtracted; an indicator of a company's pre-tax profitability.

Earnings Per Share

A financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of a company's profitability.