The Figure Above Shows the Demand Curve for Starbucks Latte

question 184

Multiple Choice

The figure above shows the demand curve for Starbucks latte.
-Using the figure above,suppose Starbucks charges $4.50 per cup for its latte.Which of the following is true?
i.At this price,the demand for Starbucks latte is elastic.
ii.If Starbucks lowers the price of its latte,its revenue will decrease.
iii.If Starbucks raises the price of its latte,the demand for it will become less elastic.

• A) Only iii
• B) Only i
• C) Only ii
• D) i and ii
• E) i and iii

---

Definitions:

Accounts Receivable

Amounts owed to a company by customers for goods or services that have been delivered or used but not yet paid for.

Prepaid Expenses

Expenses paid in advance for goods or services, which are recognized as assets until they are consumed or the term of use expires.

Bonds Issued

Long-term securities issued by corporations or governments to raise capital, with a promise to pay back with interest.

Financing Activities

Transactions that result in changes in the size and composition of the equity capital or borrowings of a company.