If the Price of a DVD Falls from $20 to $12

question 247

Multiple Choice

If the price of a DVD falls from $20 to $12 and the quantity of DVDs supplied decreases from 118,000 per hour to 100,000 per hour,using the midpoint formula the elasticity of supply equals

• A) 0.33.
• B) 2.94.
• C) 3.08.
• D) 0.23.
• E) -3.08.

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Definitions:

Derivatives

Financial securities whose value is derived from the value of an underlying asset or benchmark.

AASB 9

The Australian Accounting Standards Board standard covering the classification, measurement, and recognition of financial assets and financial liabilities.

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The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows.

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The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest.