Tele-Com, Inc

question 53

Multiple Choice

Tele-Com, Inc., a large cable TV company, tested the effect of a price reduction for the Disney Channel. It lowered prices from $10.75 to $7.95 and found that the number of customers more than doubled. This means the

• A) demand curve for the Disney Channel shifted to the right.
• B) supply curve of the Disney Channel shifted to the left.
• C) demand for the Disney Channel is elastic in this price range.
• D) demand for the Disney Channel is inelastic in this price range.

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Definitions:

Intangible Asset

An asset that lacks physical substance and represents potential future benefits; examples include patents, trademarks, and goodwill.

Defined Benefit Pension Plan

A type of pension plan where the benefits that the retiree will receive are defined based on factors such as salary history and duration of employment.

Interest Cost Component

The portion of pension expense that reflects the increase in pension benefits liability due to the passage of time, calculated based on actuarial assumptions.

Unrecognized Net Loss

A financial loss that has occurred but has not yet been reported in the company's financial statements.