Assuming Elasticity of Demand Is Reported as an Absolute Value,a

question 44

Multiple Choice

Assuming elasticity of demand is reported as an absolute value,a price elasticity of demand of 0.4 indicates an:

• A) elastic demand, meaning the percentage change in quantity demanded will be greater than the percentage change in price.
• B) inelastic demand, meaning the percentage change in quantity demanded will be greater than the percentage change in price.
• C) elastic demand, meaning the percentage change in quantity demanded will be less than the percentage change in price.
• D) inelastic demand, meaning the percentage change in quantity demanded will be less than the percentage change in price.

---

Definitions:

Foreign Direct Investment

Investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.

Market-Entry Strategies

Plans developed by businesses to enter new markets and establish a presence in them.

Global Sourcing

The purchase of materials or services from around the world for local use.

Licensing/Franchising

A business method where a company (franchisor) allows others (franchisees) to operate a business using its trademark, model, and processes in exchange for a fee.