If the Absolute Value of the Price Elasticity of Demand

question 163

Multiple Choice

If the absolute value of the price elasticity of demand for DVD moves is 0.8, then what should be the elasticity of demand for the DVD for the movie The Hangover?

• A)Less then 0.8 in absolute value
• B)Greater than 0.8 in absolute value
• C)Equal to 1 in absolute value
• D)Equal to zero because the DVD of this movie has been out for several years

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Definitions:

Revenue Recognized

The process of recording revenues in the financial statements when they are earned, which may not coincide with when the cash is received.

Collectibility

The likelihood or ability of a company to collect its accounts receivable from customers.

Sales Price

The amount of money for which a product or service is sold in the market.

Revenue In Full

The total amount of income generated by the sale of goods or services before any deductions are made.