Which of the Following Describes a Situation in Which Demand

question 158

Multiple Choice

Which of the following describes a situation in which demand must be inelastic?

• A) The price of pens rises by 10 cents, and quantity of pens demanded falls by 50.
• B) The price of pens rises by 10 cents, and total revenue rises.
• C) A 20 percent increase in the price of pens leads to a 20 percent decrease in the quantity of pens demanded.
• D) Total revenue does not change when the price of pens rises.
• E) Total revenue decreases when the price of pens rises.

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Definitions:

Trial Balance

An accounting report that lists the balances of all ledgers accounts to verify that total debits equal total credits.

Ledger

A comprehensive collection of a company’s financial accounts, recording all transactions and financial activities.

Supplies

Assets consumed or used in the operating activities of a business, often categorized as either office supplies or operational supplies.

Cash

Cash refers to money in the physical form of currency, such as banknotes and coins, which is used to conduct transactions.