If the Price of Good a Increases from $15 to $20

question 60

Multiple Choice

If the price of good A increases from $15 to $20 per unit and quantity demanded falls from 1500 to 1000 units, then by using the method of average values, we can calculate the absolute price elasticity of demand to be

• A) 2.6.
• B) 0.75.
• C) 1.4.
• D) 2.4.

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Definitions:

Return Ratio

A financial metric indicating the profitability or effectiveness of an investment, often expressed as a percentage.

Denominator

The bottom number in a fraction that shows the total number of equal parts the whole is divided into.

Quick Ratio

A financial ratio that measures a company’s “instant” debt-paying ability, computed as quick assets divided by current liabilities.

Account Payable

The liability created by a purchase on account.