An Owner of Local Salon Realized That by Decreasing the Prices

question 21

Multiple Choice

An owner of local salon realized that by decreasing the prices for haircuts,his revenue increased.This implies that

• A)The demand for haircuts is elastic
• B)The demand for haircuts is inelastic
• C)The demand for haircuts is unitary elastic
• D)The demand for haircuts is perfectly elastic

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Definitions:

Goodwill

An intangible asset that arises when a business is purchased for more than the fair value of its net identifiable assets, representing elements like reputation, customer loyalty, etc.

AASB 3

An accounting standard issued by the Australian Accounting Standards Board that deals with the accounting requirements for business combinations.

Business Combination

A transaction or other event in which an acquirer gains control of one or more businesses.

Fair Value Adjustments

Amendments made to the book value of assets or liabilities to align them with their fair value.