Microsoft Raises the Price of Its Office Software by 10

question 303

Multiple Choice

Microsoft raises the price of its Office software by 10 percent. As a result, the quantity of personal computers demanded at the current price decreases by 5 percent. What is the cross elasticity of demand for personal computers with respect to the price of Microsoft Office software?

• A) -2.0
• B) -0.5
• C) 0.5
• D) 2.0

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Definitions:

Petty Cash Fund

A small amount of cash on hand used for covering minor expenses in a business, such as office supplies or postage.

Perpetual Inventory Method

An inventory management method where stock levels are updated in real-time with each sale or purchase transaction.

Petty Cash Fund

Petty cash fund is a small amount of cash kept on hand for making immediate payments for minor and incidental expenses.