If a Product Has an Elastic Demand,this Means That

question 61

Multiple Choice

If a product has an elastic demand,this means that:

• A)consumers are relatively sensitive to a change in the price of the product.
• B)consumers are relatively insensitive to a change in the quantity demanded.
• C)consumers are relatively insensitive to a change in the price of the product.
• D)producers are relatively insensitive to a change in the price of the product.
• E)producers are relatively sensitive to a change in the quantity demanded.

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Definitions:

Component Cost

The cost related to each source of capital, such as debt and equity, that a company uses for funding.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividends.

Cost of Retained Earnings

The opportunity cost for shareholders for having the company retain the earnings instead of distributing them, often considered in investment and dividend decisions.

Risk Free Rate

The theoretical rate of return of an investment with zero risk of financial loss, often represented by the yield on government bonds.